Hypoxia inhibits Na and lung fluid reabsorption, which contributes to the formation of pulmonary edema. We tested whether dexamethasone prevents hypoxia-induced inhibition of reabsorption by stimulation of alveolar Na transport. Fluid reabsorption, transport activity, and expression of Na transporters were measured in hypoxia-exposed rats and in primary alveolar type II (ATII) cells. Rats were treated with dexamethasone (DEX; 2 mg/kg) on 3 consecutive days and exposed to 10% O2 on the 2nd and 3rd day of treatment to measure hypoxia effects on reabsorption of fluid instilled into lungs. ATII cells were treated with DEX (1 μM) for 3 days before exposure to hypoxia (1.5% O2). In normoxic rats, DEX induced a twofold increase in alveolar fluid clearance. Hypoxia decreased reabsorption (-30%) by decreasing its amiloride-sensitive component; pretreatment with DEX prevented the hypoxia-induced inhibition. DEX increased short-circuit currents (ISC) of ATII monolayers in normoxia and blunted hypoxic transport inhibition by increasing the capacity of Na+-K+-ATPase and epithelial Na + channels (ENaC) and amiloride-sensitive ISC. DEX slightly increased the mRNA of α- and γ-ENaC in whole rat lung. In ATII cells from DEX-treated rats, mRNA of α1-Na+-K +-ATPase and α-ENaC increased in normoxia and hypoxia, and γ-ENaC was increased in normoxia only. DEX stimulated the mRNA expression of α1-Na+-K+-ATPase and α-, β-, and γ-ENaC of A549 cells in normoxia and hypoxia (1.5% O 2) when DEX treatment was begun before or during hypoxic exposure. These results indicate that DEX prevents inhibition of alveolar reabsorption by hypoxia and stimulates the expression of Na transporters even when it is applied in hypoxia. Copyright © 2007 the American Physiological Society.