The transforming growth factor-β1 (TGF-β1)/Smad3 signaling pathway has a central role in pathogenesis of lung fibrosis. In the present study, we investigated if all-trans retinoic acid (ATRA) could attenuate fibrosis in bleomycin (BLM)-induced lung fibrosis in rats through regulating TGF-β1/Smad3 signaling. Beginning on day 14 after BLM administration, the ATRA I and II groups of rats received daily oral administration of ATRA for 14 days. All rats were killed on day 28. Lung tissue sections were prepared and subject to histological assessment, and expression levels of proteins involved in the TGF-β1 signaling cascade and epithelial-mesenchymal transition (EMT) were evaluated by transmission electron microscopy (TEM), quantitative real-time polymerase chain reaction (qRT-PCR), western blot procedure, and immunohistochemical or immunofluorescence staining. BLM significantly increased the alveolar septum infiltrates, inflammatory cell infiltrates, and collagen fibers. These BLM-induced changes were significantly ameliorated by ATRA treatment. In addition, BLM significantly increased levels of lung fibrosis markers α-SMA, hydroxyproline (Hyp), collagen I, Snail, and Twist, whereas significantly decreased E-cadherin expression. ATRA treatment largely reversed BLM-induced changes in these lung fibrosis markers. ATRA also blocked BLM-induced activation of the TGF-β1/Smad3 signaling pathway in lung tissues, including expression of TGF-β1, Smad3, p-Smad3, zinc-finger E-box-binding homeobox 1 and 2 (ZEB1 and ZEB2), and the high-mobility group AT-hook 2 (HMGA2). Our results suggest that ATRA may have potential therapeutic value for lung fibrosis treatment.