Intravenous infusions of Escherichia coli endotoxin into sheep caused the appearance in lung lymph of high levels of an enzyme with trypsinlike activity. The time course of appearance of the enzyme and the extent of its increase corresponded to the known events of endotoxin-induced capillary injury. Accordingly, activity was low in the first phase of endotoxin-induced increased lung lymph flow caused by increased pressure filtration but was high in the second phase of increased lung lymph flow caused by increased permeability filtration. Recovery was associated with a decrease of activity to preinfusion levels. Capillary damage and increased permeability filtration induced by air emboli or oleic acid led to a similar increase in lung lymph proteolytic activity. By contrast lung lymph proteolytic activity remained virtually unchanged during increased pressure filtration induced by inflation of a balloon in the left atrium. Activity also remained unchanged in thoracic duct lymph, indicating that the increased activity in lung lymph is not an expression of a generalized response to endotoxin. The enzyme, a serine protease with a molecular weight of about 70,000 to 75,000 and a pH optimum between 7.3 and 7.6, was not related to lymph clotting and was not capable of correcting the clotting defects of plasmas deficient in enzymes of the clotting cascade. These results together with specificity studies indicate that the enzyme represents a new, hitherto unidentified, protease. Measurements of its activity in lung lymph represent a sensitive marker of lung capillary injury.