Exogenous vascular endothelial growth factor (VEGF) accelerates compensatory lung growth (CLG) in mice after unilateral pneumonectomy. In this study, we unexpectedly discovered a method to enhance CLG with a VEGF inhibitor, soluble VEGFR1. Eight-week-old C57BL/6 male mice underwent left pneumonectomy, followed by daily intraperitoneal (ip) injection of either saline (control) or 20 μg/kg of VEGFR1-Fc. On post-operative day (POD) 4, mice underwent pulmonary function tests (PFT) and lungs were harvested for volume measurement and analyses of the VEGF signaling pathway. To investigate the role of hypoxia in mediating the effects of VEGFR1, experiments were repeated with concurrent administration of PT-2385, an inhibitor of hypoxia-induced factor (HIF)2α, via orogastric gavage at 10 mg/kg every 12 hours for 4 days. We found that VEGFR1-treated mice had increased total lung capacity (P = 0.006), pulmonary compliance (P = 0.03), and post-euthanasia lung volume (P = 0.049) compared to control mice. VEGFR1 treatment increased pulmonary levels of VEGF (P = 0.008) and VEGFR2 (P = 0.01). It also stimulated endothelial proliferation (P < 0.0001) and enhanced pulmonary surfactant production (P = 0.03). The addition of PT-2385 abolished the increase in lung volume and endothelial proliferation in response to VEGFR1. By paradoxically stimulating angiogenesis and enhancing lung growth, VEGFR1 could represent a new treatment strategy for neonatal lung diseases characterized by dysfunction of the HIF-VEGF pathway.