To defend against pulmonary infections, lung epithelial cells are equipped with complex innate immunity closely linked to inflammation. Dysregulated innate immunity/inflammation leads to self-perpetuating lung injury. The CpG motif in bacterial DNA is one of the factors involved in bacterial infection-associated inflammation. Bacterial DNA and synthetic CpG oligonucleotide (ODN) induced CCN1 secretion from lung epithelial cells, functioning as a potential "braking" signal to prevent uncontrolled inflammatory responses. CpG ODN-induced endoplasmic reticulum (ER) stress resulted in Src-Y527 phosphorylation (pY527) and Src/CCN1 vWF domain dissociation. Src-Y527 activated caveolin-1 (cav-1) phosphorylation at Y14 and then modulated CCN1 secretion via pCav-1 interaction with the CCN1 IGFbp domain. Functionally, secreted CCN1 promoted anti-inflammatory cytokine interleukin (IL)-10 release from epithelial cells via integrin αVβ6-PKC, and this subsequently suppressed tumor necrosis factor (TNF)-α, macrophage inflammatory protein 2 (MIP-2)-2 secretion and neutrophil infiltration in the lungs. Collectively, bacterial DNA/CpG ODN-stimulated CCN1 secretion via the BiP/GRP78-Src(Y527)-JNK-Cav-1(Y14) pathway and CpG-induced CCN1 conferred anti-inflammatory roles. Our studies suggested a novel paradigm by which the lung epithelium maintains innate immune homeostasis after bacterial infection.