ABSTRACT Bronchopulmonary dysplasia (BPD) is a multifactorial chronic lung disease of preterm infants. With no single effective therapy for either the prevention or treatment of BPD, the need for new tools to treat and reduce risk of further complications associated with extreme preterm birth is urgent. Indeed, mesenchymal stromal/stem cell (MSC) therapy had shown promise in preclinical models of BPD, however more recent studies have established that the main therapeutic vectors of MSCs is comprised in their secretome and represented by exosomes. Exosomes are submicron, lipid bilayer-enclosed extracellular vesicles (EVs) expressed by most cells. Their varied origin, biogenesis and molecular composition enroll them in diverse and potent physiological roles, the most intriguing of which is an effective method of cell-to-cell communication. The MSC exosome composition has been reported to include small noncoding RNAs, free fatty acids, surface receptors and proteins, serving as vectors of MSC therapeutic effects. Consequently, in addition to their diverse roles in health and disease, exosomes represent novel reagents for therapeutic applications. We isolated exosomes from human MSC conditioned media, termed MEx, and showed that they inhibit BPD in the neonatal hyperoxia mouse model. Specifically, one dose of Mex inhibits lung inflammation, alveolar injury, pulmonary hypertension, fibrosis, and normalizes long-term lung function. We have demonstrated that MEx are taken up by macrophages (Mφs) and, as result, shift the Mφ phenotype to inflammation resolving, antifibrotic, and anti- remodeling. We hypothesize that Mφs are key vectors of MEx therapeutic action, orchestrating cell-to-cell communication signals to promote normal alveogenesis and to restore lung homeostasis. We will test this hypothesis in the following specific aims: SA#1: To isolate and comprehensively characterize MEx subpopulations and investigate mechanisms of their action and biological potency in vitro and in vivo; SA#2: To test the role of monocytes/Mφs as mediators of MEx signals to lung cells; SA#3: To investigate the biologic function of monocytes/Mφs, modified by MEx, on hyperoxia-induced BPD in vivo.