Acute inflammatory injury in rat lung induced by deposition of immunoglobulin G immune complexes requires expression of cytokines and chemokines as well as activation of the transcription factor nuclear factor (NF)-κB. There is little direct evidence regarding the role of alveolar macrophages in these activation events. In the present studies, rat lungs were depleted of alveolar macrophages by airway instillation of liposome-encapsulated dichloromethylene diphosphonate. These procedures, which greatly reduced the number of retrievable alveolar macrophages, suppressed activation of lung NF-κB in the inflammatory model. In addition, bronchoalveolar lavage levels of tumor necrosis factor-α (TNF-α) and the CXC chemokine, macrophage inflammatory protein-2, were substantially reduced. In parallel, upregulation of the lung vascular adhesion molecule, intercellular adhesion molecule-1, was greatly reduced by intrapulmonary instillation of phosphonate-containing liposomes. Neutrophil accumulation and development of lung injury were also substantially diminished. Lung instillation of TNF-α in alveolar macrophage–depleted rats restored the NF-κB activation response in whole lung. These data suggest that, in this inflammatory model, initial activation of NF-κB occurs in alveolar macrophages and the ensuing production of TNF-α may propagate NF-κB activation to other cell types in the lung.