Recovery from lung injury during the neonatal period requires the orchestration of many biological pathways. The modulation of such pathways can drive the developing lung towards proper repair or persistent maldevelopment that can lead to a disease phenotype. Sex as a biological variable can regulate these pathways differently in the male and female lung exposed to neonatal hyperoxia. In this study, we assessed the contribution of cellular diversity in the male and female neonatal lung following injury. Our objective was to investigate sex and cell-type specific transcriptional changes that drive repair or persistent injury in the neonatal lung and delineate the alterations in the immune-endothelial cell communication networks using single cell RNA sequencing (sc-RNAseq) in a murine model of hyperoxic injury. We generated transcriptional profiles of >55,000 cells isolated from the lungs of postnatal day 1 (PND 1) and postnatal day 21 (PND 21) neonatal male and female C57BL/6 mice exposed to 95% FiO 2 between PND 1-5 (saccular stage of lung development). We show the presence of sex-based differences in the transcriptional states of lung endothelial and immune cells at PND 1 and PND 21. Furthermore, we demonstrate that biological sex significantly influences the response to injury, with a greater number of differentially expressed genes showing sex-specific patterns than those shared between male and female lungs. Pseudotime trajectory analysis highlighted genes needed for lung development that were altered by hyperoxia. Finally, we show intercellular communication between endothelial and immune cells at saccular and alveolar stages of lung development with sex-based biases in the crosstalk and identify novel ligand-receptor pairs. Our findings provide valuable insights into the cell diversity, transcriptional state, developmental trajectory, and cell-cell communication underlying neonatal lung injury, with implications for understanding lung development and possible therapeutic interventions while highlighting the crucial role of sex as a biological variable.