There is no effective intervention to prevent or treat bronchopulmonary dysplasia (BPD). Curcumin has potent antioxidant and anti-inflammatory properties, and it modulates signaling of peroxisome proliferator-activated receptor-γ (PPARγ), an important molecule in the pathobiology of BPD. However, its role in the prevention of BPD is not known. We determined 1) if curcumin enhances neonatal lung maturation, 2) if curcumin protects against hyperoxia-induced neonatal lung injury, and 3) if this protection is mediated by blocking TGF-β. Embryonic day 19 fetal rat lung fibroblasts were exposed to 21% or 95% O(2) for 24 h following 1 h of treatment with curcumin. Curcumin dose dependently accelerated e19 fibroblast differentiation [increased parathyroid hormone-related protein (PTHrP) receptor, PPARγ, and adipocyte differentiation-related protein (ADRP) levels and triolein uptake] and proliferation (increased thymidine incorporation). Pretreatment with curcumin blocked the hyperoxia-induced decrease (PPARγ and ADRP) and increase (α-smooth muscle actin and fibronectin) in markers of lung injury/repair, as well as the activation of TGF-β signaling. In a separate set of experiments, neonatal Sprague-Dawley rat pups were exposed to 21% or 95% O(2) for 7 days with or without intraperitoneal administration of curcumin. Analysis for markers of lung injury/repair [PTHrP receptor, PPARγ, ADRP, fibronectin, TGF-β receptor (activin receptor-like kinase 5), and Smad3] and lung morphology (radial alveolar count) demonstrated that curcumin effectively blocks TGF-β activation and hyperoxia-induced lung injury. Therefore, curcumin accelerates lung maturation by stimulating key alveolar epithelial-mesenchymal interactions and prevents hyperoxia-induced neonatal lung injury, possibly by blocking TGF-β activation, suggesting that it is a potential intervention against BPD.