<p>Oxygen supplementation triggers inflammation and disrupts alveolar and microvascular growth in preterm infants, often leading to bronchopulmonary dysplasia (BPD). The autonomic nervous system (ANS) is critical in lung tissue homeostasis and repair. The sympathetic co-neurotransmitter neuropeptide Y (NPY) emerges as a central regulator of the ANS-organ interface with immune-modulatory function. Here, we studied sympathetic nervous system (SNS) signaling and the contribution of NPY to a hyperoxia-based model of BPD. To this end, neonatal wild-type (WT) and NPY knockout mice (NPY^−/−) were exposed to 85% O₂ (HYX) or 21% O₂ (NOX) from birth to postnatal day 14. Prolonged hyperoxia caused a 7-fold increase of tyrosine hydroxylase (TH) protein, an enzyme characteristic for the SNS, and NPY mRNA (&gt; 40-fold) in neonatal WT lungs. The analysis of lung scRNA-seq revealed an upregulation of NPY in alveolar macrophages of WT^HYX when compared to WT^NOX. In contrast, NPY^{−/− HYX} showed lower amount of TH than WT^HYX, indicating reduced sympathetic-associated signaling. Quantitative histomorphometry demonstrated an aggravated hyperoxia-induced alveolar growth arrest and septal thickening in NPY^{−/− HYX}, whereas vascular muscularization and proliferation of vascular smooth muscle cells (SMC) were attenuated compared to WT^HYX. Additionally, NPY^{−/− HYX} were protected from hyperoxia-induced CD68⁺ macrophage recruitment, despite exhibiting higher lung expression of <i>Il6</i> (20-fold) and <i>Il1b</i> (4-fold) than WT^HYX. In summary, our data demonstrate a dual role of NPY in neonatal lungs in response to hyperoxia, preserving alveolarization while promoting immune cell recruitment and vascular muscularization, highlighting the importance of ANS-lung interface in lung maturation and injury.</p>