Sclareol is a natural fragrance compound that is used widely in the cosmetic and food industries. This study examined the effect of sclareol on lipopolysaccharide (LPS)-induced acute lung injury (ALI) in mice. Mice were treated with sclareol 1 h before an intratracheal (I.T.) LPS challenge to induce an ALI model. The effects on lung tissue and lung injury were evaluated 6 h after LPS induction. Pretreatment with sclareol noticeably improved the LPS-induced histological alterations and edema in lung tissue. Sclareol also inhibited the release of pro-inflammatory mediators. Differences in nitric oxide (NO), tumor necrosis factor alpha (TNF-α), interleukin-1 beta (IL-1β), IL-6, and IL-10 were found in the bronchoalveolar lavage fluid (BALF) 6 h after LPS-induced lung injury. This study also found a reduced number of total cells and reduced protein concentrations in the BALF. There were also changes in the pulmonary wet/dry (W/D) weight ratio, antioxidant enzyme activity, and myeloperoxidase activity in lung tissues. Sclareol effectively blocked the phosphorylation of mitogen-activated protein kinases (MAPKs) and impeded the protein expression of inducible nitric oxide synthase (iNOS) and cyclooxygenase-2 (COX-2). The compound boosted the expression of heme oxygenase-1 (HO-1) and inhibited the breakdown of nuclear factor-kappa B (NF-κB) and inhibitor of kappa B (IκBα). To the best of the authors' knowledge, this study is the first to demonstrate that sclareol effectively inhibits acute lung edema, and the results suggest that sclareol may be a potential agent for the treatment of ALI. The potential therapeutic benefits may include the attenuation of LPS-induced pulmonary inflammation due to sclareol's effects on several pathways, including NF-κB, MAPKs and HO-1, as well as the regulation of antioxidant enzyme activity.