This study determines effects of oxygen levels on morphology and VEGF expression of developing chicken lungs following incubation in normoxia (21% O2), hypoxia (15% O2) or hyperoxia (30% O2), until developmental days 16 or 18. Lung morphology was assessed using light microscopy, while VEGF expression was determined with ELISA. In hypoxia, the proportion of parabronchial tissue and parabronchi including lumina increased from day 16 to 18 (61 to 68% and 74.2 to 82.2%, respectively). Non-parabronchial tissue was higher in hypoxia than in hyperoxia on day 16 (26 to 20%). However, by day 18, there were no differences between groups. VEGF expression was 33% higher in hypoxia than in hyperoxia on day 16 (736 vs. 492 pg/ml). On day 18, VEGF expression was 43% higher in hyperoxia than in normoxia (673 to 381pg/ml), and remained elevated by 40% in hypoxia over normoxia (631 pg/ml). VEGF may be a mechanism by which parabronchial tissue is stimulated from day 16 to 18 following exposure to chronic hypoxia.