Bronchopulmonary dysplasia (BPD) remains a main complication of extreme prematurity. Bone marrow derived-mesenchymal stem cells (BM-MSC) prevent lung injury in an O(2)-induced model of BPD. The low level of lung BM-MSC engraftment suggests alternate mechanisms-beyond cell replacement-to account for their therapeutic benefit. We hypothesized that BM-MSC prevent O(2)-induced BPD through a paracrine-mediated mechanism and that preconditioning of BM-MSC would further enhance this paracrine effect. To this end, conditioned medium (CM) from BM-MSC (MSCcm) or preconditioned CM harvested after 24 h of BM-MSC exposure to 95% O(2) (MSC-O2cm) were administrated for 21 days to newborn rats exposed to 95% O(2) from birth until postnatal day (P)14. Rat pups exposed to hyperoxia had fewer and enlarged air spaces and exhibited signs of pulmonary hypertension (PH), assessed by echo-Doppler, right ventricular hypertrophy, and pulmonary artery medial wall thickness. Daily intraperitoneal administration of both CM preserved alveolar growth. MSC-O2cm exerted the most potent therapeutic benefit and also prevented PH. CM of lung fibroblasts (control cells) had no effect. MSCcm had higher antioxidant capacity than control fibroblast CM. Preconditioning did not increase the antioxidant capacity in MSC-O2cm but produced higher levels of the naturally occurring antioxidant stanniocalcin-1 in MSC-O2cm. Ex vivo preconditioning enhances the paracrine effect of BM-MSC and opens new therapeutic options for cell-based therapies. Ex vivo preconditioning may also facilitate the discovery of MSC-derived repair molecules.