Aims: Oxygen is a pulmonary vasodilator, but data suggest high O₂ concentrations impede that response. We previously reported 24 h of 100% O₂ increased phosphodiesterase 5 (PDE5) activity in fetal pulmonary artery smooth muscle cells (FPASMC) and in ventilated neonatal lambs. PDE5 degrades cyclic GMP (cGMP) and inhibits nitric oxide (NO)-mediated cGMP-dependent vasorelaxation. We sought to determine the mechanism by which hyperoxia initiates reactive oxygen species (ROS) production and regulates PDE5. Results: Thirty minutes of hyperoxia increased mitochondrial ROS versus normoxia (30.3±1.7% vs. 21.1±2.8%), but had no effect on cytosolic ROS, measured by roGFP, a ratiometric protein thiol redox sensor. Hyperoxia increased PDE5 activity (220±39%) and decreased cGMP responsiveness to NO (37±17%). Mitochondrial catalase overexpression attenuated hyperoxia-induced mitochondrial roGFP oxidation, compared to FPASMC infected with empty adenoviral vector (50±3% of control) or mitochondrial superoxide dismutase. MitoTEMPO, mitochondrial catalase, and DT-3, a cGMP-dependent protein kinase I alpha inhibitor, decreased PDE5 activity (32±13%, 26±21%, and 63±10% of control, respectively), and restored cGMP responsiveness to NO (147±16%,172±29%, and 189±43% of control, respectively). C57Bl6 mice exposed to 90%–100% O₂ for 45 min±mechanical ventilation had increased PA PDE5 activity (206±39% and 235±75%, respectively). Innovation: This is the first description that hyperoxia induces ROS in the mitochondrial matrix prior to the cytosol. Our results indicate that short hyperoxia exposures can produce significant changes in critical cellular signaling pathways. Conclusions: These results indicate that mitochondrial matrix oxidant signals generated during hyperoxia, specifically H₂O₂, activate PDE5 in a cGMP-dependent protein kinase–dependent manner in pulmonary vascular smooth muscle cells. Antioxid. Redox Signal. 17, 460–470.