Prematurely born infants often require supplemental oxygen that impairs lung growth and results in arrest of alveolarization and bronchopulmonary dysplasia (BPD). The growth hormone (GH)- and insulin-like growth factor (IGF)1 systems regulate cell homeostasis and organ development. Since IGF1 is decreased in preterm infants, we investigated the GH- and IGF1 signaling (1) in newborn mice with acute and prolonged exposure to hyperoxia as well as after recovery in room air; and (2) in cultured murine lung epithelial cells (MLE-12) and primary neonatal lung fibroblasts (pLFs) after treatment with GH, IGF1, and IGF1-receptor (IGF1-R) inhibitor or silencing of GH-receptor (Ghr) and Igf1r using the siRNA technique. We found that (1) early postnatal hyperoxia caused an arrest of alveolarization that persisted until adulthood. Both short-term and prolonged hyperoxia reduced GH-receptor expression and STAT5 signaling, whereas Igf1 mRNA and pAKT signaling were increased. These findings were related to a loss of epithelial cell markers (SFTPC, AQP5) and proliferation of myofibroblasts (αSMA+ cells). After recovery, GH-R-expression and STAT5 signaling were activated, Igf1r mRNA reduced, and SFTPC protein significantly increased. Cell culture studies showed that IGF1 induced expression of mesenchymal (e.g., Col1a1, Col4a4) and alveolar epithelial cell type I (Hopx, Igfbp2) markers, whereas inhibition of IGF1 increased SFTPC and reduced AQP5 in MLE-12. GH increased Il6 mRNA and reduced proliferation of pLFs, whereas IGF1 exhibited the opposite effect. In summary, our data demonstrate an opposite regulation of GH- and IGF1- signaling during short-term/prolonged hyperoxia-induced lung injury and recovery, affecting alveolar epithelial cell differentiation, inflammatory activation of fibroblasts, and a possible uncoupling of the GH-IGF1 axis in lungs after hyperoxia.