Introduction: Prolonged breathing of high oxygen concentration leads to hyperoxic acute lung injury. Neonatal Respiratory diseases usually require increased supplement of high oxygen concentrations, so neonates are more susceptible to hyperoxic acute lung injury. The aim of this work was to investigate the protective role of caffeine versus N-acetylcysteine against hyperoxic acute lung injury in neonatal rats. Materials and Methods: 32 albino rats aged seven days were used in this experiment. The pups were divided into four groups; 1) Control or normoxic group; rats placed in normoxic chamber where fraction of inspired oxygen (FiO2 ) was 0.21, 2) Hyperoxic group; rats were placed in hyperoxic chamber (FiO2 >0.8) using an oxygen flow of 1.5 Litre/min, 3) Hyperoxia?CAF group; rats exposed to hyperoxia and received a single intra-peritoneal injection of 20 mg/kg caffeine just prior to exposure, and 4) Hyperoxia?NAC group; rats exposed to hyperoxia and received a single intra-peritoneal injection of 150 mg/kg N-acetylcysteine just prior to exposure. 48 hours after exposure, lung specimens were processed for histological and immunohistochemical study using caspase-3, cluster of differentiation-68-antibody (CD68) and interleukin-1-beta (IL-1?). Results: Neonatal hyperoxia led to severe impairment in lung architecture, with a highly significant increase in alveolar macrophages. Also, caspase and IL-1? immune-reaction were increased significantly as compared to control group. Caffeine could improve the histolopathological picture of hyperoxic acute lung injury, and also could decrease alveolar macrophage count and IL-1? immune-reaction better than N-acetylcysteine. Conclusion: Caffeine is more effective than N-acetylcysteine in prophylaxis against hyperoxic acute lung injury in neonates.