When an infant is born prematurely, there are a number of health risks. Among these are underdeveloped lungs, which can lead to abnormal gas exchange of oxygen or hypoxemia. Hypoxemia is treated through oxygen therapy, which involves the delivery of supplemental oxygen to the patient but there are risks associated with this method. Risks include retinopathy, which can cause eye damage when oxygen concentration is too high, and brain damage, when the concentration is too low [1]. Supplemental oxygen concentration must be controlled rigorously. Currently healthcare staff monitors infants’ blood oxygen saturation level using a pulse oximeter. They manually adjust the oxygen concentration using an air-oxygen blender. Inconsistent manual adjustments can produce excessive fluctuations and cause the actual oxygen saturation level to deviate from the target value. Precision and accuracy are compromised. This project develops an automatic oxygen delivery system that regulates the supplemental oxygen concentration to obtain a target blood oxygen saturation level. A microprocessor uses a LABVIEW® program to analyze pulse oximeter and analyzer readings and control electronic valves in a redesigned air-oxygen blender. A user panel receives a target saturation level, displays patient data, and signals alarms when necessary. The prototype construction and testing began February 2010.