Hyperoxia (HO)-induced lung injury contributes to bronchopulmonary dysplasia (BPD) in preterm newborns. Intractable wheezing seen in BPD survivors is associated with airway remodeling (AWRM). Sphingosine kinase 1 (SPHK1)/sphingosine-1-phosphate (S1P) signaling promotes HO-mediated neonatal BPD; however, its role in the sequela of AWRM is not known. We noted an increased concentration of S1P in tracheal aspirates of neonatal infants with severe BPD, and earlier, demonstrated that Sphk1^−/− mice showed protection against HO-induced BPD. The role of SPHK1/S1P in promoting AWRM following exposure of neonates to HO was investigated in a murine model. Therapy using PF543, the specific SPHK1 inhibitor, during neonatal HO reduced alveolar simplification followed by reduced AWRM in adult mice. This was associated with reduced airway hyperreactivity to intravenous methacholine. Neonatal HO exposure was associated with increased expression of SPHK1 in lung tissue of adult mice, which was reduced with PF543 therapy in the neonatal stage. This was accompanied by amelioration of HO-induced reduction of E-cadherin in airway epithelium. This may be suggestive of arrested partial epithelial mesenchymal transition (EMT) induced by HO. In vitro studies using human primary airway epithelial cells (HAEpCs) showed that SPHK1 inhibition or deletion restored HO-induced reduction in E-cadherin and reduced formation of mitochondrial reactive oxygen species (mtROS). Blocking mtROS with MitoTempo attenuated HO-induced partial EMT of HAEpCs. These results collectively support a therapeutic role for PF543 in preventing HO-induced BPD in neonates and the long-term sequela of AWRM, thus conferring a long-term protection resulting in improved lung development and function.