To observe the effect of progesterone (PROG) on blood-brain barrier (BBB) permeability, brain tissue water content and dynamic changes of aquaporin-4 (AQP-4) in neonatal rats with hypoxic-ischaemic brain damage (HIBD). 72 neonatal Wistar rats, aged 7 days old, were randomly divided into control, hypoxic-ischaemic (6, 24 and 72 h, and 7 d subgroups) and drug groups (6, 24 and 72 h, and 7 d subgroups). The HIBD animal model was established. BBB was detected via an Evans blue tracer. Brain water content was determined by the dry/wet method. The AQP-4 expression in the cerebral cortex was observed through immunohistochemistry and Western blot. BBB permeability in the cerebral cortex of the neonatal rats, brain water content and AQP-4 expression in the hypoxia-ischaemia group were significantly higher than those of the control group after hypoxia for 6 h (P < 0.05), continued to rise within 24 h and then reached the peak at 72 h. BBB permeability in the cerebral cortex of the neonatal rats, brain water content and AQP-4 expression in the drug group were significantly lower than those of the hypoxia-ischaemia group after hypoxia for 6, 24 and 72 h (P < 0.05). Moreover, BBB permeability and BBB expression were positively correlated with the AQP-4 expression. In conclusion, PROG protects the brain of HIBD neonatal rats by alleviating the damage of BBB and cerebral oedema. The protective effect of PROG may be related to the down-regulation of AQP-4 expression in the cerebral cortex of neonatal rats.