The biological functions of the acute- phase protein haptoglobin (Hp) may be related to its ability to bind hemoglobin (Hb) or to modulate immune response. Hp is expressed at a high level in lung cells, yet its protective role(s) in the lung is not known. With the use of transgenic mice overexpressing Hp in alveolar macrophages, we demonstrated that Hp diminished Hb-induced lung injury when the lung was exposed to whole blood. In transgenic mouse lungs, Hb was more efficiently removed, and the induction of stress- responsive heme oxygenase-1 gene was significantly lower when compared with wild-type mice. At 24 h after blood treatment, the ferritin level that serves as an index for intracellular iron content was also lower in alveolar macrophages in transgenic mice than in wild-type mice. We propose that an Hp-mediated Hb catabolism process exists in alveolar macrophages. This process is likely coupled to an iron mobilization pathway and may be an efficient mechanism to reduce oxidative damage associated with hemolysis.