Mechanical ventilation has been shown to produce lung injury characterized by noncardiogenic pulmonary edema. Keratinocyte growth factor (KGF) is a heparin-binding growth factor that causes alveolar type II pneumocyte hyperplasia. KGF pretreatment and the resultant pneumocyte hyperplasia reduce fluid flux in models of lung injury. We utilized the isolated perfused rat lung model to produce lung injury by varying tidal volume and the level of positive end-expiratory pressure during mechanical ventilation. Pretreatment with KGF attenuated ventilator-induced lung injury (VILI). This was demonstrated by lower wet-to-dry lung weight ratios and less lung water accumulation in the KGF group. Further, KGF prevented the decline in dynamic compliance and alveolar protein accumulation in VILI. KGF pretreatment reduced alveolar accumulation of intravascularly administered fluorescein isothiocyanate-labeled high-molecular–weight dextran. Thus, pretreatment with KFG attenuates injury in this ex vivo model of VILI via mechanisms that prevent increases in permeability.