Ureaplasma infection is associated with increased lung disease in high-risk neonates. Our goal was to determine the impact of antibiotic prophylaxis on Ureaplasma and oxygen-induced lung disease in newborn mice. In animal model development and prophylaxis experiments, pups were randomly assigned to either 0.8 or 0.21 inspired oxygen concentration [fraction of inspired oxygen (FiO2)] from 1 to 14 d of age and either Ureaplasma or 10 B media daily from 1 to 3 d. All pups were observed for growth and survival. Surviving pups had culture and PCR evaluated for blood, bronchoalveolar lavage, and lung, and lung weights, pathology, morphometry, histology, and immunohistochemistry were determined. In prophylaxis experiments, erythromycin, azithromycin, or normal saline was given for the first 3 d, and minimum inhibitory concentration and pharmacokinetics were determined. In model development, 0.8 FiO2 and Ureaplasma infection survival and growth were significantly decreased and lung edema and inflammation were significantly increased. In prophylaxis experiments, we observed significantly improved survival and growth with azithromycin versus normal saline controls, whereas erythromycin was not significantly different from controls, and decreased inflammatory response with azithromycin versus normal saline and erythromycin. In a neonatal mouse model of Ureaplasma and oxygen-induced lung disease, appropriate antibiotic prophylaxis improves survival and morbidity and decreases lung inflammation.