Phosphodiesterase-5 (PDE5) is the primary phosphodiesterase in the pulmonary vasculature. It degrades cyclic guanosine monophosphate (cGMP) and inhibits cGMP-mediated vasorelaxation. We previously reported that hydrocortisone treatment decreased hyperoxia-induced PDE5 activity and markers of oxidative stress in lambs with persistent pulmonary hypertension of the newborn (PPHN) ventilated with 100% O2. The objective of our study was to determine the molecular mechanism by which hydrocortisone downregulates PDE5 and oxidative stress in fetal pulmonary artery smooth muscle cells (FPASMCs) from PPHN lambs. PPHN FPASMC were incubated for 24 hours in either 21% or 95% O2. Some cells were treated with 100 nM hydrocortisone and/or +/-1 muM helenalin, an inhibitor of nuclear factor kappa B (NFkappaB), a redox-sensitive transcription factor. Exposure to hyperoxia led to increased PDE5 activity, oxidative stress, and NFkappaB activity. Pretreatment of PPHN FPASMC with hydrocortisone normalized PDE5 activity, decreased cytosolic oxidative stress, increased expression of extracellular superoxide dismutase and NFkappaB inhibitory protein, and decreased NFkappaB activity. Similarly, treatment with NFkappaB inhibitor, helenalin, decreased PDE5 activity. These data suggest that hyperoxia activates NFkappaB, which in turn induces PDE5 activity in PPHN FPASMC, whereas treatment with hydrocortisone attenuates these changes by blocking reactive oxygen species-induced NFkappaB activity.