Bronchopulmonary dysplasia (BPD) is a severe complication of preterm births, which develops due to exposure to supplemental oxygen and mechanical ventilation. Published studies demonstrated that the number of endothelial progenitor cells (EPC) is decreased in mouse and human BPD lungs and that adoptive transfer of EPC is an effective approach in reversing the hyperoxia-induced lung damage in mouse model of BPD. Recent advancements in macrophage biology identified the specific subtypes of circulating and resident macrophages mediating the developmental and regenerative functions in the lungs. Several studies reported the successful application of macrophage therapy in accelerating the regenerative capacity of damaged tissues and enhancing the therapeutic efficacy of other transplantable progenitor cells. In the present study, we explored the efficacy of combined cell therapy with EPC and resident alveolar macrophages (rAM) in hyperoxia-induced BPD mouse model. rAM and EPC were purified from neonatal mouse lungs and were used for adoptive transfer to the recipient neonatal mice exposed to hyperoxia. Adoptive transfer of rAM alone did not result in engraftment of donor rAM into the lung tissue but increased the mRNA level and protein concentration of proangiogenic CXCL12 chemokine in recipient mouse lungs. Depletion of rAM by chlodronate-liposomes decreased the retention of donor EPC after their transplantation into hyperoxia-injured lungs. Adoptive transfer of rAM in combination with EPC enhanced the therapeutic efficacy of EPC as evidenced by increased retention of EPC, increased capillary density, improved arterial oxygenation, and alveolarization in hyperoxia-injured lungs. Dual therapy with EPC and rAM has promise in human BPD.NEW & NOTEWORTHY Recent studies demonstrated that transplantation of lung-resident endothelial progenitor cells (EPC) is an effective therapy in mouse model of bronchopulmonary dysplasia (BPD). However, key factors regulating the efficacy of EPC are unknown. Herein, we demonstrate that transplantation of tissue-resident alveolar macrophages (rAM) increases CXCL12 expression in neonatal mouse lungs. rAM are required for retention of donor EPC in hyperoxia-injured lungs. Co-transplantation of rAM and EPC improves the efficacy of EPC therapy in mouse BPD model.