Myofibroblast accumulation is a pathological feature of lung diseases requiring oxygen therapy. One possible source for myofibroblasts is through the epithelial-to-mesenchymal transition (EMT) of alveolar epithelial cells (AEC). To study the effects of oxygen on alveolar EMT, we used RLE-6TN and ex vivo lung slices and found that hyperoxia (85% O2, H85) decreased epithelial proteins, presurfactant protein B (pre-SpB), pro-SpC, and lamellar protein by 50% and increased myofibroblast proteins, α-smooth muscle actin (α-SMA), and vimentin by over 200% (P < 0.05). In AEC freshly isolated from H85-treated rats, mRNA for pre-SpB and pro-SpC was diminished by ∼50% and α-SMA was increased by 100% (P < 0.05). Additionally, H85 increased H2O2 content, and H2O2 (25-50 μM) activated endogenous transforming growth factor-β1 (TGF-β1), as evident by H2DCFDA immunofluorescence and ELISA (P < 0.05). Both hyperoxia and H2O2 increased SMAD3 phosphorylation (260% of control, P < 0.05). Treating cultured cells with TGF-β1 inhibitors did not prevent H85-induced H2O2 production but did prevent H85-mediated α-SMA increases and E-cadherin downregulation. Finally, to determine the role of TGF-β1 in hyperoxia-induced EMT in vivo, we evaluated AEC from H85-treated rats and found that vimentin increased ∼10-fold (P < 0.05) and that this effect was prevented by intraperitoneal TGF-β1 inhibitor SB-431542. Additionally, SB-431542 treatment attenuated changes in alveolar histology caused by hyperoxia. Our studies indicate that hyperoxia promotes alveolar EMT through a mechanism that is dependent on activation of TGF-β1 signaling.