Disrupted epithelial barrier, fluid accumulation, inflammation, and compromised physiology are hallmarks of lung injury. Here we investigated the structural stability of the Toll-like receptor-4 (TLR4)-interacting SPA4 peptide, its effect on Pseudomonas aeruginosa lipopolysaccharide (LPS)-disrupted epithelial barrier in a human cell system, and lung injury markers in a mouse model of LPS-induced lung inflammation. The structural properties of SPA4 peptide were investigated using circular dichroism and UV-VIS spectroscopy. The transepithelial electrical resistance (TEER), an indicator of barrier function, was measured after the cells were challenged with 1 μg/ml LPS and treated with 10 or 100 μM SPA4 peptide. The expression and localization of tight junction proteins were studied by immunoblotting and immunocytochemistry, respectively. Mice were intratracheally challenged with 5 μg LPS per g body weight and treated with 50 μg SPA4 peptide. The lung wet/dry weight ratios or edema, surfactant protein-D (SP-D) levels in serum, lung function, tissue injury, body weights, and temperature, and survival were determined as study parameters. The spectroscopy results demonstrated that the structure was maintained among different batches of SPA4 peptide throughout the study. Treatment with 100 μM SPA4 peptide restored the LPS-disrupted epithelial barrier, which correlated with the localization pattern of Zonula Occludens (ZO)-1 and occludin proteins. Correspondingly, SPA4 peptide treatment helped suppress the lung edema and levels of serum SP-D, improved some of the lung function parameters, and reduced the mortality risk against LPS challenge. Our results suggest that the anti-inflammatory activity of the SPA4 peptide facilitates the resolution of lung pathology.