The alveolar compartment in acute lung injury contains high levels of tissue factor (TF) procoagulant activity favoring fibrin deposition. We previously reported that the alveolar epithelium can release TF procoagulant activity in response to a proinflammatory stimulus. To test the hypothesis that the alveolar epithelium further modulates intra-alveolar fibrin deposition through secretion of an endogenous inhibitor to TF, tissue factor pathway inhibitor (TFPI), we measured TFPI levels in edema fluid (EF) from patients with acute respiratory distress syndrome. To determine whether the alveolar epithelium can release TFPI, both full-length TFPI and truncated TFPI were measured (ELISA) in pulmonary edema fluid from patients with acute respiratory distress syndrome (ARDS) and a control group of patients with hydrostatic pulmonary edema (HYDRO). TFPI protein was also measured in conditioned media (CM) and cell lysates (CL) from human alveolar epithelial cells (A549) after exposure to cytomix (TNF-alpha, IL-1 beta, IFN-gamma). TFPI protein levels were higher in pulmonary edema fluid from patients with ARDS vs. HYDRO. TFPI protein was increased in CM and did not change in CL after cytomix treatment; TFPI mRNA levels (RT-PCR) did not change. Despite the high levels of TFPI, both the EF and CM retained significant TF procoagulant activity as measured by plasma recalcification time. The majority of intra-alveolar TFPI was in a truncated, inactive form, whereas the majority of TFPI released from cells was full length, suggesting different mechanisms of inactivation. In summary, the alveolar epithelium releases TFPI in response to an inflammatory stimulus but does not increase TFPI gene transcription or protein production. Levels of intra-alveolar TFPI in ARDS are not sufficient to block intra-alveolar TF procoagulant activity due to truncation and inactivation of intra-alveolar TFPI.