Exogenous mesenchymal stromal cells (MSCs) ameliorate experimental bronchopulmonary dysplasia. Moreover, data from term-born animal models and human tracheal aspirate-derived cells suggest altered mesenchymal signaling in the pathophysiology of neonatal lung disease. We hypothesized that hyperoxia, a factor contributing to the development of bronchopulmonary dysplasia, perturbs human lung-resident MSC function. Mesenchymal cells were isolated from human fetal lung tissue (16-18 wk of gestation), characterized and cultured in conditions resembling either intrauterine (5% O ) or extrauterine (21% and 60% O ) atmospheres. Secretome data were compared with MSCs obtained from term umbilical cord tissues. The human fetal lung mesenchyme almost exclusively contains CD146 MSCs expressing SOX-2 and OCT-4, which secrete elastin, fibroblast growth factors 7 and 10, vascular endothelial growth factor, angiogenin, and other lung cell-protecting/-maturing proteins. Exposure to extrauterine atmospheres leads to excessive proliferation, reduced colony-forming ability, alterations in the cell's surface marker profile, decreased elastin deposition, and impaired secretion of factors important for lung growth. Conversely, umbilical cord-derived MSCs abundantly secreted factors that impaired lung MSCs are unable to produce. Oxygen-impaired human fetal lung MSC function may contribute to disrupted repair capacity and arrested lung growth. Exogenous MSCs may act by triggering the signaling pathways lost by impaired endogenous lung mesenchymal cells.