Objectives: This study was performed to assay the effect of neodymium oxide on the generation of reactive oxygen species and DNA oxidative damage by intratracheal instillation. Methods: Two groups of rats were exposed to neodymium oxide($Nd_2O_3$) via intratracheal instillation with doses of 0.5 mg and 2.0 mg, respectively. At two days and at 12 weeks after exposure, the contents of neodymium oxide in the lung, liver, kidney, heart and brain, leukocyte, olive tail moment, ROS, RNS, lactate dehydrogenase, albumin, cytokine and MDA from BALF were measured. Results: Neodymium oxide contents in the liver, kidney, heart, and brain were detected at less than $1{mu}g/g$ tissue concentration. However, in the lungs at four weeks the highest amount were detected and then found to be drastically reduced at 12 weeks. ROS and RNS in bronchoalveolar lavage increased in concentration dependently at two days, four weeks and 12 weeks after neodymium oxide instillation. However, ROS and RNS decreased with the passage of time. At two days the total number of WBC in BALF in the high concentration group was significantly increased, and at four weeks the total number of WBC were significantly increased in the low and high concentration groups(p<0.01). At two days after exposure, the LDH of the low and high concentration groups was significantly increased. At 12 weeks, only the LDH of the high concentration group was significantly increased compared to in the control group(p<0.01). As a result of Comet assay, after two days, damage to the DNA of the low and high concentration groups was observed. Conclusions: Intratracheal instillation of neodymium oxide induces the generation of ROS and DNA damage in rats.