Surfactant protein B (SP-B) is a 79-amino acid hydrophobic surfactant protein that plays a critical role in postnatal lung function. Homozygous SP-B (−/−)-deficient mice die of respiratory failure at birth, associated with severe pulmonary dysfunction and atelectasis. Heterozygous SP-B (+/−)-deficient mice have 50% less SP-B protein, proprotein, and SP-B mRNA compared with control mice and are highly susceptible to oxygen-induced lung injury. In the current study, we tested whether the susceptibility of SP-B (+/−) mice to hyperoxia was restored by intratracheal administration of exogenous SP-B. After exposure to 95% oxygen for 3 d, opening pressures were increased and maximal lung volumes were significantly decreased in SP-B (+/−) mice compared with SP-B (+/+) mice. SP-B (+/−) mice were administered purified bovine SP-B (2%) with DL-α dipalmitoyl phosphatidylcholine (DPPC) and 1-palmitoyl-2-oleoyl-sn-glycero-3-[phospho-rac-(1-glycerol)](POPG) phospholipids or DPPC and POPG phospholipids intratracheally and exposed to 95% oxygen. SP-B–treated SP-B (+/−) mice survived longer in 95% oxygen. Although decreased lung function in SP-B (+/−) mice exposed to oxygen was not altered by administration of DPPC and POPG, administration of lipids containing 2% purified bovine SP-B restored lung function when assessed after 3 d in oxygen. Abnormalities in pulmonary function in SP-B (+/−) mice after oxygen exposure were associated with increased alveolar capillary leak, which was corrected by administration of SP-B with DPPC and POPG. Likewise, histologic abnormalities caused by oxygen-induced lung injury were improved by administration of SP-B with DPPC and POPG. Administration of phospholipids with the active SP-B peptide was sufficient to restore pulmonary function and prevent alveolar capillary leak after oxygen exposure, demonstrating the protective role of SP-B during oxygen-induced lung injury.