Acute lung injury (ALI) is a devastating disease with an overall mortality rate of 30 to 40%. The coagulation/fibrinolysis system is implicated in the pathogenesis of ALI. Thrombin-activatable fibronolysis inhibitor (TAFI) is an important component of the fibrinolysis system. Recent studies have shown that the active form of TAFI can also regulate inflammatory responses by its ability to inhibit complement C3a, C5a, and osteopontin. We hypothesized that TAFI might have a protective role in ALI. To demonstrate this hypothesis, the development of ALI was compared between wild-type (WT) and TAFI-deficient mice. ALI was induced by intratracheal instillation of LPS. Control mice were treated with saline. Animals were killed 24 hours after LPS. The number of inflammatory cells and the concentration of total protein and inflammatory cytokines were significantly increased in bronchoalveolar lavage fluid from LPS-treated, TAFI-deficient mice compared with their WT counterparts. Significantly higher concentrations of C5a were found in bronchoalveolar lavage fluid and plasma in LPS-treated TAFI knockout mice compared with WT mice. Pretreatment with inhaled C5a receptor antagonist blocked the detrimental effects of TAFI deficiency to levels found in WT mice. Our results show that TAFI protects against ALI, at least in part, by inhibiting the complement system.