Transforming growth factor-α (TGF-α) is produced in the lung in experimental and human lung diseases; however, its physiological actions after lung injury are not understood. To determine the influence of TGF-α on acute lung injury, transgenic mouse lines expressing differing levels of human TGF-α in distal pulmonary epithelial cells under control of the surfactant protein C gene promoter were generated. TGF-α transgenic and nontransgenic control mice were exposed to polytetrafluoroethylene (PTFE; Teflon) fumes to induce acute lung injury. Length of survival of four separate TGF-α transgenic mouse lines was significantly longer than that of nontransgenic control mice, and survival correlated with the levels of TGF-α expression in the lung. The transgenic line expressing the highest level of TGF-α (line 28) and nontransgenic control mice were then compared at time intervals of 2, 4, and 6 h of PTFE exposure for differences in pulmonary function, lung histology, bronchoalveolar lavage fluid protein and cell differential, and lung homogenate proinflammatory cytokines. Line 28 TGF-α transgenic mice demonstrated reduced histological changes, decreased bronchoalveolar lavage fluid total protein and neutrophils, and delayed alterations in pulmonary function measures of airway obstruction compared with those in nontransgenic control mice. Both line 28 and nontransgenic control mice had similar increases in interleukin-1β protein levels in lung homogenates. In contrast, interleukin-6 and macrophage inflammatory protein-2 levels were significantly reduced in line 28 transgenic mice compared with those in nontransgenic control mice. In the transgenic mouse model, TGF-α protects against PTFE-induced acute lung injury, at least in part, by attenuating the inflammatory response.