BACKGROUND As a traditional Chinese medicine prescription, Xiao-Xu-Ming decoction (XXMD) could reduce the incidence of lung infection of patients with cerebral infarction. Nonetheless, the therapeutic mechanisms of XXMD in acute lung injury (ALI) remain to be elucidated. Our study was aimed to assess the effects of XXMD protects against ALI. METHODS ALI model was induced by intraperitoneal injection of lipopolysaccharide (LPS) in vivo. In vitro, human pulmonary alveolar epithelial cells (HPAEpiC) were treated with XXMD and were followed by LPS treatment. The levels of ZO-1, CLDN4, NLRP3, and caspase 1 were detected by Western blot, and the content of IL-1 and IL-18 was determined by ELISA. Transepithelial electrical resistance was used to detect the cell permeability. The reactive oxygen species (ROS) levels within the cells were evaluated by flow cytometry. RESULTS Our results showed that XXMD attenuated LPS-induced oxidative stress, barrier dysfunction, and the activation of NLRP3 inflammasome in vitro, as evidenced by enhanced ROS production, TEER levels, expression of NLRP3 and caspase 1 (p20) and release of IL-1β and IL-18, and weakened cell permeability. In addition, XXMD could counteract the effects of NLRP3 overexpression on HPAEpiC and vice versa. XXMD treatment also ameliorated the degree of neutrophil infiltration, barrier dysfunction, and the activation of NLRP3 in LPS-induced ALI lung tissues in vivo. CONCLUSIONS The findings showed that XXMD could alleviate LPS-induced ALI injury and inhibit inflammation and suppress ROS/NLRP3 signaling pathway, which were involved in these protective effects.