Bronchopulmonary dysplasia (BPD) is a chronic disease of extreme prematurity that has serious long-term consequences including increased asthma risk. We earlier identified IL-1 receptor antagonist (IL-1Ra) as a potent inhibitor of murine BPD induced by combining perinatal inflammation (intra-peritoneal lipopolysaccharide to pregnant dams) and exposure of pups to hyperoxia (FiO2 0.65). In this study we determined whether airway remodeling and hyperresponsiveness similar to asthma are evident in this model, and whether IL-1Ra is protective. During 28d exposure to air or hyperoxia, pups received vehicle or 10mg/kg IL-1Ra by daily subcutaneous injection. Lungs were then prepared for histology and morphometry of alveoli and airways, or for real time PCR, or inflated with agarose to prepare precision cut lung slices to visualize ex vivo intrapulmonary airway contraction and relaxation by phase-contrast microscopy. In pups reared under normoxic conditions, IL-1Ra treatment did not affect alveolar or airway structure or airway responses. Pups reared in hyperoxia developed a severe BPD-like lung disease, with fewer, larger alveoli, increased subepithelial collagen, and increased expression of α-smooth muscle actin and cyclin D1. Following hyperoxia, methacholine elicited contraction with similar potency but with an increased maximum reduction in lumen area (Air 44%; Hyperoxia 89%), while dilator responses to salbutamol were maintained. IL-1Ra treatment prevented hyperoxia-induced alveolar disruption and airway fibrosis, but surprisingly not the increase in methacholine-induced airway contraction. The current study is the first to demonstrate ex vivo airway hyperreactivity caused by systemic maternal inflammation and postnatal hyperoxia and reveals further preclinical mechanistic insights into IL-1Ra as a treatment targeting key pathophysiological features of BPD.