Respiratory distress syndrome (RDS) due to insufficient production of surfactant is a common and severe complication of preterm delivery. Here, we report that loss of the hypoxia-inducible transcription factor-2alpha (HIF-2alpha) caused fatal RDS in neonatal mice due to insufficient surfactant production by alveolar type 2 cells. VEGF, a target of HIF-2alpha, regulates fetal lung maturation: because VEGF levels in alveolar cells were reduced in HIF-2alpha-deficient fetuses; mice with a deficiency of the VEGF(164) and VEGF(188) isoforms or of the HIF-binding site in the VEGF promotor died of RDS; intrauterine delivery of anti-VEGF-receptor-2 antibodies caused RDS and VEGF stimulated production of surfactant proteins by cultured type 2 pneumocytes. Intrauterine delivery or postnatal intratracheal instillation of VEGF stimulated conversion of glycogen to surfactant and protected preterm mice against RDS. The pneumotrophic effect of VEGF may have therapeutic potential for lung maturation in preterm infants.