Background: Late preterm and term newborns with respiratory distress are increasingly treated with non-invasive ventilation (NIV) including nasal high-flow or continuous positive airway pressure. For infants with mild distress, NIV may be unnecessary. Objectives: We speculated that treatment with supplemental oxygen (SO) prior to NIV could help clinicians select infants for NIV treatment, and examined this hypothesis using data from a recently completed trial. Method: Post hoc analysis of data from a subset of infants enrolled in the HUNTER trial. Infants born at ≥36 weeks' gestation were categorized by whether they were receiving SO prior to randomization. The 2 groups were compared for illness severity (indicated by treatment failure at 72 h, mechanical ventilation, need for up-transfer, SO requirement post-randomization, and length of time receiving respiratory support), use of selected medical interventions (antibiotics, intravenous fluids), and breastfeeding at discharge. Results: Analysis included 380 infants. Infants not receiving SO had less severe illness; lower rates of treatment failure (7.3 vs. 17.2%), mechanical ventilation (0.6 vs. 5.9%), need for transfer (6.8 vs. 13.8%), and more often did not receive any SO post-randomization (75.1 vs. 3.0%). Most infants in both groups received intravenous fluids (93 and 98%) and antibiotics (81 and 93%); the rate of full breastfeeding was low in both groups (51 and 45%). Conclusions: Late preterm and term newborn infants without SO requirement at the time of commencing NIV for respiratory distress are at lower risk of requiring treatment escalation. Close observation of these infants (watch and wait strategy) may avoid unnecessary treatment.