Lung diseases characterized by alveolar damage such as bronchopulmonary dysplasia (BPD) in premature infants and emphysema lack efficient treatments. Understanding the mechanisms contributing to normal and impaired alveolar growth and repair may identify new therapeutic targets for these lung diseases. Axonal guidance cues are molecules that guide the outgrowth of axons. Amongst these axonal guidance cues, members of the Semaphorin family, in particular Semaphorin 3C (Sema3C), contribute to early lung branching morphogenesis. The role of Sema3C during alveolar growth and repair is unknown. We hypothesized that Sema3C promotes alveolar development and repair. In vivo Sema3C knock down using intranasal siRNA during the postnatal stage of alveolar development in rats caused significant air space enlargement reminiscent of BPD. Sema3C knock down was associated with increased TLR3 expression and lung inflammatory cells influx. In a model of O2-induced arrested alveolar growth in newborn rats mimicking BPD, air space enlargement was associated with decreased lung Sema3C mRNA expression. In vitro, Sema3C treatment preserved alveolar epithelial cell viability in hyperoxia and accelerated alveolar epithelial cell wound healing. Sema3C preserved lung microvascular endothelial cell vascular network formation in vitro under hyperoxic conditions. In vivo, Sema3C treatment of hyperoxic rats decreased lung neutrophil influx and preserved alveolar and lung vascular growth. Sema3C also preserved lung plexinA2 and Sema3C expression, alveolar epithelial cell proliferation and decreased lung apoptosis. In conclusion, the axonal guidance cue Sema3C promotes normal alveolar growth and may be worthwhile further investigating as a potential therapeutic target for lung repair.