Alcohol abuse markedly increases the risk of sepsis-mediated acute lung injury. In a rat model, ethanol ingestion alone (in the absence of any other stress) causes pulmonary glutathione depletion, increased expression of transforming growth factor-beta1 (TGF-beta1), and alveolar epithelial barrier dysfunction, even though the lung appears grossly normal. However, during endotoxemia, ethanol-fed rats release more activated TGF-beta1 into the alveolar space where it can exacerbate epithelial barrier dysfunction and lung edema. Ethanol ingestion activates the renin-angiotensin system, and angiotensin II is capable of inducing oxidative stress and TGF-beta1 expression. We determined that lisinopril, an angiotensin-converting enzyme inhibitor that decreases angiotensin II formation, limited lung glutathione depletion, and treatment with either lisinopril or losartan, a selective angiotensin II type 1 receptor blocker, normalized TGF-beta1 expression. The glutathione precursor procysteine also prevented TGF-beta1 expression, suggesting that TGF-beta1 may be induced indirectly by angiotensin II-mediated oxidative stress and glutathione depletion. Importantly, lisinopril treatment normalized barrier function in alveolar epithelial cell monolayers from ethanol-fed rats, and treatment with either lisinopril or losartan normalized alveolar epithelial barrier function in ethanol-fed rats in vivo, as reflected by lung liquid clearance of an intratracheal saline challenge, even during endotoxemia. In parallel, lisinopril treatment limited TGF-beta1 protein release into the alveolar space during endotoxemia. Together, these results suggest that angiotensin II mediates oxidative stress and the consequent TGF-beta1 expression and alveolar epithelial barrier dysfunction that characterize the alcoholic lung.