Objective: To investigate the protective effect of keratinocyte growth factor (KGF) on lipopolysaccharide (LPS)-induced acute lung injury (ALI) and its potential mechanism in rats. Methods: Thirty-six Sprague-Dawley (SD) rats were randomly divided into three groups, each group with 12 rats. LPS (5 mg/kg) was injected intravenously to induce ALI in model group, and same amount of normal saline was injected in control group and KGF group. The rats in KGF group were treated with KGF (5 mg/kg) intratracheally after injection of LPS. The rats were sacrificed after 8 hours, histologic assessments, wet/dry weight (W/D) ratio, pulmonary vascular permeability, lung epithelial cell permeability, the proliferation and repair capacity of type I alveolar epithelial cells (AT I) were analyzed. Results: Under optical microscope, it was found that KGF could reduce injury to lung tissue induced by LPS. Compared with the model group, KGF could decrease pulmonary vascular permeability [(0.026±0.049)% vs. (0.087± 0.027)%], lung epithelial cell permeability [(0.692±0.017) % vs. (0.931±0.029)%] and W/D ratio (4.778±0.243 vs. 6.869±0.153, P<0.05 or P<0.01), enhance the proliferation and repair capacity of AT I cells (AT I cells: 6.083±1.781 vs. 4.666±1.923, injury area (mm), 2.946±0.453 vs. 6.181±0.975, P<0.05 and P<0.01). Conclusion: KGF could reduce the injury to the lung in LPS-induced ALI, and it plays a protective role through enhancing the proliferation and repair capacity of AT I cells.