This study investigated if mitochondrial dysfunction contributes to alveolar developmental arrest in a mouse model of bronchopulmonary dysplasia (BPD). To induce BPD, 3 day old mice were exposed to 75% O2. Mice were studied at two time points of hyperoxia: (1) 72 hours, (2) 2 weeks and after 3 weeks of recovery in room air (RA). A separate cohort of mice was exposed to pyridaben, a complex-I (C-I) inhibitor, for 72 hours or two weeks. Alveolarization was quantified by radial alveolar count and mean linear intercept methods. Pulmonary mitochondrial function was defined by respiration rates, ATP-production rate and C-I activity. At 72 hours hyperoxic mice demonstrated significant inhibition of C-I activity, reduced respiration and ATP-production rates and significantly decreased RAC compared to controls. Exposure to pyridaben for 72 hours, as expected, caused significant inhibition of C-I and ADP-phosphorylating respiration. Similar to hyperoxic littermates, these pyridaben-exposed mice exhibited significantly delayed alveolarization compared to controls. At two weeks of exposure to hyperoxia or pyridaben, mitochondrial respiration was inhibited and associated with alveolar developmental arrest. However, following three weeks of recovery from hyperoxia or two weeks after 72 hours of exposure to pyridaben alveolarization significantly improved. In addition, there was marked normalization of C-I and mitochondrial respiration. The degree of hyperoxia-induced pulmonary simplification and recovery strongly (r² = 0.76) correlated with C-I activity in lung mitochondria. Thus, the arrest of alveolar development induced by either hyperoxia or direct inhibition of mitochondrial oxidative phosphorylation indicates that bioenergetic failure to maintain normal alveolar development is one of the fundamental mechanisms responsible for BPD.