Endothelial cell (EC) dysfunction is a critical mediator of the acute respiratory distress syndrome (ARDS). Recent studies have demonstrated that stromal cell-derived factor 1α (SDF-1α) promotes EC barrier integrity. Our previous studies used a SDF-1α analogue CTCE-0214 (CTCE) in experimental sepsis and demonstrated that it attenuated vascular leak and modulated microRNA (miR) levels. We examined the hypothesis that CTCE improves EC function in lipopolysaccharide (LPS)-induced ARDS through increasing miR-126 expression. Human microvascular endothelial cells (HMVECs) were treated with thrombin to disrupt the EC integrity followed by incubation with CTCE or SDF-1α. Barrier function was determined by trans-endothelial electrical resistance assay. CTCE-induced alterations in miRNA expression and signaling pathways involved in barrier function were determined. Thrombin-induced vascular leak was abrogated by both CTCE and SDF-1α. CTCE also prevented thrombin-induced decreases of vascular endothelial (VE)-cadherin cell surface expression and expansion of the intercellular space. CTCE increased miR-126 levels and induced activation of AKT/Rac 1 signaling. Cotreatment with a miR-126 inhibitor blocked the protective effects of CTCE on AKT activation and endothelial permeability. In subsequent in vivo studies, ARDS was induced by intratracheal instillation of LPS. Intravenous injection of CTCE diminished the injury severity as evidenced by significant reductions in protein, immune cells, inflammatory cytokines and chemokines in the bronchoalveolar lavage fluid, increased miR-126 expression and decreased pulmonary vascular leak and alveolar edema. Taken together, our data show that CTCE improves endothelial barrier integrity through increased expression of miR-126 and activation of Rac 1 signaling and represents an important potential therapeutic strategy in ARDS.