Patients with the acute respiratory distress syndrome (ARDS) have elevated levels of cell-free hemoglobin (CFH) in the air space, but the contribution of CFH to the pathogenesis of acute lung injury is unknown. In the present study, we demonstrate that levels of CFH in the air space correlate with measures of alveolar-capillary barrier dysfunction in humans with ARDS ( r = 0.89, P < 0.001) and in mice with ventilator-induced acute lung injury ( r = 0.89, P < 0.001). To investigate the specific contribution of CFH to ARDS, we studied the impact of purified CFH in the mouse lung and on cultured mouse lung epithelial (MLE-12) cells. Intratracheal delivery of CFH in mice causes acute lung injury with air space inflammation and alveolar-capillary barrier disruption. Similarly, in MLE-12 cells, CFH increases proinflammatory cytokine expression and increases paracellular permeability as measured by electrical cell-substrate impedance sensing. Next, to determine whether these effects are mediated by the iron-containing heme moiety of CFH, we treated mice with intratracheal hemin, the chloride salt of heme, and found that hemin was sufficient to increase alveolar permeability but failed to induce proinflammatory cytokine expression or epithelial cell injury. Together, these data identify CFH in the air space as a previously unrecognized driver of lung epithelial injury in human and experimental ARDS and suggest that CFH and hemin may contribute to ARDS through different mechanisms. Interventions targeting CFH and heme in the air space could provide a new therapeutic approach for ARDS.