Acute lung injury (ALI) is a devastating clinical syndrome with no effective therapies. Inflammasome activation has been reported to play a critical role in the initiation and progression of ALI. The molecular mechanisms involved in regulating the activation of inflammasome in ALI remains unresolved, although increases in mitochondrial derived reactive oxygen species (mito-ROS) are involved. Our previous work has shown that the mitochondrial redistribution of uncoupled eNOS impairs mitochondrial bioenergetics and increases mito-ROS generation. Thus, the focus of our study was to determine if lipopolysaccharide (LPS)-mediated inflammasome activation involves the mitochondrial redistribution of uncoupled eNOS. Our data show that the increase in mito-ROS involved in LPS-mediated inflammasome activation is associated with the disruption of mitochondrial bioenergetics in human lung microvascular endothelial cells (HLMVEC) and the mitochondrial redistribution of eNOS. These effects are dependent on RhoA-ROCK signaling and are mediated via increased phosphorylation of eNOS at Threonine (T)-495. A derivative of the mitochondrial targeted Szeto-Schiller peptide (SSP) attached to the antioxidant Tiron (T-SSP), significantly attenuated LPS-mediated mito-ROS generation and inflammasome activation in HLMVEC. Further, T-SSP attenuated mitochondrial superoxide production in a mouse model of sepsis induced ALI. This in turn significantly reduced the inflammatory response and attenuated lung injury. Thus, our findings show that the mitochondrial redistribution of uncoupled eNOS is intimately involved in the activation of the inflammatory response in ALI and implicate attenuating mito-ROS as a therapeutic strategy in humans.