Objective To explore the role and mechanism of caffeine citrate in the treatment of bronchopulmonary dysplasia (BPD) in premature infants. Methods Hyperoxic BPD models of neonatal rats and MLE-12 lung epithelial cells were constructed, and the control group, hyperoxic group, and low, medium, and high dose of caffeine citrate intervention groups were set up respectively. The effects of caffeine citrate were evaluated using H&E staining, immunofluorescence staining, CCK8 apoptosis assay, and flow cytometry apoptosis detection. The occurrence of mitochondrial stress and apoptosis was further detected by reactive oxygen species (ROS) immunofluorescence assay, electron microscopy observation, and western blot assay. Results Caffeine citrate intervention increased the survival rate, promoted the body weight gain, and ameliorated the lung tissue injury in neonatal rats after hyperoxia exposure. Caffeine citrate intervention increased the survival rate of MLE-12 cells, reduced the loss of surfactant protein C (SPC), and inhibited apoptosis. In terms of mechanism of action, caffeine citrate reduced the level of reactive oxygen species (ROS), repaired mitochondrial structure, and regulated the expression of proteins related to mitochondrial stress pathways (eIF2α-ATF4-CHOP) and mitochondrial apoptotic pathways (Bax, Bcl2 and Cleaved caspase-3). Conclusions Caffeine citrate ameliorates hyperoxia-induced lung injury by repairing mitochondrial function and inhibiting oxidative stress and apoptosis, which plays an active role in the treatment of BPD in preterm infants.