Therapies with prolonged exposure to high-concentration oxygen are common in the treatment of critical pulmonary and cardiac conditions in newborns. However, prolonged exposure to hyperoxia could result in lung damages and developmental disorders manifested as acute lung injury and bronchopulmonary dysplasia, respectively. Calcitonin gene-related peptide (CGRP) has been shown to have a broad regulatory effect on the respiratory system. In this study, we explored the protective effects of CGRP on the hyperoxia-induced lung damage. Newborn Sprague-Dawley rats were randomly divided into three groups: normoxia, hyperoxia, and hyperoxia with CGRP. Hyperoxia groups were exposed to 95% oxygen for 14 days and treated once every other day with saline or CGRP. Hyperoxia exposure reduced the survival rate to 73%, when compared with the 93% survival rate observed in the normoxia group. The survival rate was improved to 84% with CGRP treatment. Treatment with CGRP under hyperoxia significantly alleviated the hyperoxia-induced lung histomorphological changes and the increases in leukocyte counts and total protein levels in bronchoalveolar lavage fluid that reflect the pulmonary microvasular damages. CGRP treatment also restored the decreased activity of superoxide dismutase, while it decreased the increased level of malondialdehyde in the lung tissues. Importantly, CGRP treatment significantly decreased the magnitude of the hyperoxia-mediated increase in the expression levels of tumor necrosis factor-α mRNA and transforming growth factor-β 1 protein. In conclusion, the hyperoxia-induced acute lung injury is associated with both oxidative stress and inflammatory responses, and CGRP may ameliorate the hyperoxia-induced lung injury by down-regulating these processes.