Bronchopulmonary dysplasia (BPD) remains a significant contributor to infant mortality and morbidity despite advances in neonatal care. We have previously showed that human amnion epithelial cells (hAECs) can be a viable source of cell therapy for established BPD, and extracellular vesicles (EVs) derived from pro-regenerative cells could be a potential therapy by transporting proteins, lipids, mRNA and microRNA. Here we characterized hAEC-derived EVs and assessed the efficacy of hAEC-EVs on neonatal lung injury where BPD-like injury was achieved using a combination of antenatal inflammation and postnatal hyperoxia. The isolated hAEC-EVs had distinct cup shaped morphology with average size of 40-120nm. ALIX (96kDa), Grp94 (92kDa) and HLA-G (38kDa) were expressed in EVs and Pathway enrichment analysis showed that endothelin signaling pathway, Wnt signaling pathway, and inflammation mediated by chemokine and cytokine signaling pathway were enriched in hAEC-EVs. In mouse model of BPD-like lung injury, we observed that hAEC-EVs improved tissue-to-airspace ratio and septal crest density in a dose-dependent manner. hAEC-EV administration reduced the levels of inflammatory cytokines such as interleukin (IL)-1β and tumour necrosis factor-alpha (TNF-α). These were associated with the increase of percentage of type II alveolar cells. Surprisingly, hAEC-EVs reduced airway hyper-responsiveness, mitigated pulmonary hypertension and prevented right ventricle hypertrophy that associated with BPD-like lung injury, and this persisted until to 10 weeks of age. These findings argue for the assessment of hAEC-EVs as a prophylactic intervention in future clinical trials for babies at risk of developing BPD.