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Preterm infants are at high risk for developing bronchopulmonary dysplasia and pulmonary hypertension from inflammatory lung injury. In adult models, adiponectin (APN)—an adipocyte‐derived hormone—protects the lung from inflammatory injury and pulmonary vascular remodeling. Cord blood APN levels in premature infants born, Extremely low birth weight infants are at increased risk of developing acute and chronic lung disease from inflammation; they have low fat stores at birth and thus low circulating levels of the adipokine, adiponectin. Adiponectin is a potent anti‐inflammatory and anti‐oxidant adipokine. Here we show that recombinant adiponectin (rAPN) given to newborn rats in the saccular stage of lung development decreases LPS‐induced expression of proinflammatory cytokines and chemokines in lung homogenates and histopathological changes in the lung as shown in this graphical abstract. LPS was given intrapharyngeally and rAPN was given intraperitoneally. rAPN was effective in decreasing lung inflammation whether it was given as prevention or rescue therapy. Safe strategies that elevate endogenous APN may be benefical to extremely premature infants at risk of lung disease.