Mechanical ventilation plays a central role in the pathogenesis of bronchopulmonary dysplasia. However, the mechanisms by which excessive stretch of fetal or neonatal type II epithelial cells contributes to lung injury are not well defined. In these investigations, isolated embryonic day 19 fetal rat type II epithelial cells were cultured on substrates coated with fibronectin and exposed to 5% or 20% cyclic stretch to simulate mechanical forces during lung development or lung injury, respectively. Twenty percent stretch of fetal type II epithelial cells increased necrosis, apoptosis, and proliferation compared with control, unstretched samples. By ELISA and real-time PCR (qRT-PCR), 20% stretch increased secretion of IL-8 into the media and IL-8 gene expression and inhibited IL-10 release. Interestingly, administration of recombinant IL-10 before 20% stretch did not affect cell lysis but significantly reduced apoptosis and IL-8 release compared with stretched samples without IL-10. Collectively, our studies suggest that IL-10 may play an important role in protection of fetal type II epithelial cells from injury secondary to stretch.