γ-Glutamyl transferase (GGT) is critical to glutathione homeostasis by providing substrates for glutathione synthesis. We hypothesized that loss of GGT would cause oxidant stress in the lung. We compared the lungs of GGTenu1mice, a genetic model of GGT deficiency, with normal mice in normoxia to study this hypothesis. We found GGT promoter 3 (P3) alone expressed in normal lung but GGT P3 plus P1, an oxidant-inducible GGT promoter, in GGTenu1lung. Glutathione content was barely decreased in GGTenu1lung homogenate and elevated nearly twofold in epithelial lining fluid, but the fraction of oxidized glutathione was increased three- and fourfold, respectively. Glutathione content in GGTenu1alveolar macrophages was decreased nearly sixfold, and the oxidized glutathione fraction was increased sevenfold. Immunohistochemical studies showed glutathione deficiency together with an intense signal for 3-nitrotyrosine in nonciliated bronchiolar epithelial (Clara) cells and expression of heme oxygenase-1 in the vasculature only in GGTenu1lung. When GGTenu1mice were exposed to hyperoxia, survival was decreased by 25% from control because of accelerated formation of vascular pulmonary edema, widespread oxidant stress in the epithelium, diffuse depletion of glutathione, and severe bronchiolar cellular injury. These data indicate a critical role for GGT in lung glutathione homeostasis and antioxidant defense in normoxia and hyperoxia.