HMGB1-RAGE signaling pathway is involved in the development of ALI/ARDS. At the same time, activation of PPARγ has been shown to inhibit the occurrence of ALI/ARDS. However, it is unknown whether activation of PPARγ benefits ALI/ARDS by regulation of HMGB1-RAGE signaling. This study aims to address these issues. We found in this study that LPS induced dramatic pathological changes of ALI in mice; these were accompanied with elevated expression of HMGB1 and RAGE. Prior treatment of mice with PPARγ agonist rosiglitazone significantly suppressed LPS-induced ALI and reversed the elevation of HMGB1 and RAGE; these were accompanied with the induction of HO-1. The presence of selective HO-1 inhibitor Znpp abolished the protective effects of rosiglitazone on LPS-induced ALI. This study suggests that activation of PPARγ inhibits the development of LPS-induced ALI by negative modulation of HMGB1-RAGE pathway, and has a potential value in the clinical treatment of such conditions.