Susceptibility to acute lung injury (ALI) and acute respiratory distress syndrome (ARDS) varies greatly among patients in sepsis/septic shock. The genetic and biochemical reasons for the difference are not fully understood. G protein coupled receptor family C group 5 member A (GPRC5A), a retinoic acid target gene, is predominately expressed in the bronchioalveolar epithelium of lung. We hypothesized that Gprc5a is important in controlling the susceptibility to ALI or ARDS. In this study, we examined the susceptibility of wild-type and Gprc5a-knockout (ko) mice to induced ALI. Administration of endotoxin LPS induced an increased pulmonary edema and injury in Gprc5a-ko mice, compared to wild-type counterparts. Consistently, LPS administration induced higher levels of inflammatory cytokines (IL-1β and TNFα) and chemokine (KC) in Gprc5a-ko mouse lungs than in wild-type. The enhanced pulmonary inflammatory responses were associated with dysregulated NF-κB signaling in the bronchioalveolar epithelium of Gprc5a-ko mouse lungs. Importantly, selective inhibition of NF-κB through expression of the super-repressor IκBα in the bronchioalveolar epithelium of Gprc5a-ko mouse lungs alleviated the LPS-induced pulmonary injury, and inflammatory response. Thus, Gprc5a is critical for lung homeostasis, and Gprc5a deficiency confers the susceptibility to endotoxin-induced pulmonary edema and injury, mainly through NF-κB signaling in bronchioalveolar epithelium of lung.