New evidence indicates that neural mechanisms can down-regulate acute inflammation. In these studies, we tested the potential role of the α7 nicotinic acetylcholine receptor (α7 nAChR) in a rodent model of acid-induced acute lung injury. We first determined that the α7 nAChR was expressed by alveolar macrophages and lung epithelial cells. Then, using an acid-induced acute lung injury mouse model, we found that nicotine, choline, and PNU-282987 (a specific α7 nAChR agonist) decreased excess lung water and lung vascular permeability, and reduced protein concentration in the bronchoalveolar lavage (BAL). Deficiency of α7 nAChR resulted in a 2-fold increase in excess lung water and lung vascular permeability. The reduction of proinflammatory cytokines (macrophage inflammatory protein-2 and TNF-α) in the BAL with nicotine probably resulted from the suppression of NF-κB activation in alveolar macrophages. The beneficial effect of nicotine was also tested in rat model of acid-induced acute lung injury in which BAL protein and receptor for advanced glycation end products (RAGE), a marker of type I cell injury, were reduced by nicotine treatment. These results indicate that activation of α7 nAChR may provide a new therapeutic pathway for the treatment of acute lung injury.