Preclinical drug development studies currently rely on costly and time-consuming animal testing because existing cell culture models fail to recapitulate complex, organ-level disease processes in humans. We provide the proof of principle for using a biomimetic microdevice that reconstitutes organ-level lung functions to create a human disease model-on-a-chip that mimics pulmonary edema. The microfluidic device, which reconstitutes the alveolar-capillary interface of the human lung, consists of channels lined by closely apposed layers of human pulmonary epithelial and endothelial cells that experience air and fluid flow, as well as cyclic mechanical strain to mimic normal breathing motions. This device was used to reproduce drug toxicity-induced pulmonary edema observed in human cancer patients treated with interleukin-2 (IL-2) at similar doses and over the same time frame. Studies using this on-chip disease model revealed that mechanical forces associated with physiological breathing motions play a crucial role in the development of increased vascular leakage that leads to pulmonary edema, and that circulating immune cells are not required for the development of this disease. These studies also led to identification of potential new therapeutics, including angiopoietin-1 (Ang-1) and a new transient receptor potential vanilloid 4 (TRPV4) ion channel inhibitor (GSK2193874), which might prevent this life-threatening toxicity of IL-2 in the future.