Abstract Acute lung injury is a side effect of therapy with a high concentration of inspired oxygen in patients. The molecular mechanism underlining this effect is poorly understood. In this study, we report that overexpression of Stat3C, a constitutive active form of STAT3, in respiratory epithelial cells of a doxycycline-controlled double-transgenic mouse system protects lung from inflammation and injury caused by hyperoxia. In this mouse line, >50% of transgenic mice survived exposure to 95% oxygen at day 7, compared with 0% survival of wild-type mice. Overexpression of STAT3C delays acute capillary leakage and neutrophil infiltration into the alveolar region. This protection is mediated at least partially through inhibition of hyperoxia-induced synthesis and release of matrix metalloproteinase (MMP)-9 and MMP-12 by neutrophils and alveolar resident cells. In some MMP-9−/− mice, prolonged survival was observed under hyperoxic condition. The finding supports a concept that activation of the Stat3 pathway plays a role to prevent hyperoxia-induced inflammation and injury in the lung.