Adiponectin (APN) is an adipose tissue-derived factor with anti-inflammatory and vascular protective properties whose levels paradoxically decrease with increasing body fat. In this study, APN’s role in the early development of ALI to LPS was investigated. Intratracheal LPS elicited an exaggerated systemic inflammatory response in APN-deficient (APN(-/-)) mice compared with wild-type (wt) littermates. Increased lung injury and inflammation were observed in APN(-/-) mice as early as 4 h after delivery of LPS. Targeted gene expression profiling performed on immune and endothelial cells isolated from lung digests 4 h after LPS administration showed increased proinflammatory gene expression (e.g., IL-6) only in endothelial cells of APN(-/-) mice when compared with wt mice. Direct effects on lung endothelium were demonstrated by APN’s ability to inhibit LPS-induced IL-6 production in primary human endothelial cells in culture. Furthermore, T-cadherin-deficient mice that have significantly reduced lung airspace APN but high serum APN levels had pulmonary inflammatory responses after intratracheal LPS that were similar to those of wt mice. These findings indicate the importance of serum APN in modulating LPS-induced ALI and suggest that conditions leading to hypoadiponectinemia (e.g., obesity) predispose to development of ALI through exaggerated inflammatory response in pulmonary vascular endothelium.