Bronchopulmonary dysplasia (BPD), the most common complication of extreme preterm birth, can be caused by oxygen-related lung injury and is characterized by impaired alveolar and vascular development. Mesenchymal stromal cells (MSCs) have lung protective effects. Conversely, BPD is associated with increased MSCs in tracheal aspirates. We hypothesized that endogenous lung (L-)MSCs are perturbed in a well-established oxygen-induced rat model mimicking BPD features. Rat pups were exposed to 21% or 95% oxygen from birth to postnatal day 10. On day 12, CD146 + L-MSCs were isolated and characterized according to the International Society for Cellular Therapy criteria. Epithelial and vascular repair potential were tested by scratch assay and endothelial network formation, respectively, immune function by mixed lymphocyte reaction assay. Microarray analysis was performed using the Affymetrix GeneChip and gene set enrichment analysis software. CD146 + L-MSCs isolated from rat pups exposed to hyperoxia had decreased CD73 expression and inhibited lung endothelial network formation. CD146 + L-MSCs indiscriminately promoted epithelial wound healing and limited T cell proliferation. Expression of potent antiangiogenic genes of the axonal guidance cue and CDC42 pathways was increased after in vivo hyperoxia, whereas genes of the anti-inflammatory Janus kinase (JAK)/signal transducer and activator of transcription (STAT) and lung/vascular growth-promoting fibroblast growth factor (FGF) pathways were decreased. In conclusion, in vivo hyperoxia exposure alters the proangiogenic effects and FGF expression of L-MSCs. In addition, decreased CD73 and JAK/STAT expression suggests decreased immune function. L-MSC function may be perturbed and contribute to BPD pathogenesis. These findings may lead to improvements in manufacturing exogenous MSCs with superior repair capabilities.