Picrasma quassiodes (D.Don) Benn. (PQ) is a medicinal herb belonging to the family Simaroubaceae and is used as a traditional herbal remedy for various diseases. In this study, we evaluated the effects of PQ on airway inflammation using a mouse model of lipopolysaccharide (LPS)-induced acute lung injury (ALI) and LPS-stimulated raw 264.7 cells. ALI was induced in C57BL/6 mice by the intranasal administration of LPS, and PQ was administered orally 3 days prior to exposure to LPS. Treatment with PQ significantly attenuated the infiltration of inflammatory cells in the bronchoalveolar lavage fluid (BALF). PQ also decreased the production of reactive oxygen species (ROS) and pro-inflammatory cytokines, such as tumor necrosis factor (TNF)-α and interleukin (IL)-6 in BALF. In addition, PQ inhibited airway inflammation by reducing the expression of inducible nitric oxide synthase (iNOS) and by increasing the expression of heme oxygenase-1 (HO-1) in the lungs. Furthermore, we demonstrated that PQ blocked the activation of mitogen-activated protein kinase (MAPK) and nuclear factor-κB (NF-κB) in the lungs of mice with LPS-induced ALI. In the LPS-stimulated RAW 264.7 cells, PQ inhibited the release of pro-inflammatory cytokines and increased the mRNA expression of monocyte chemoattractant protein-1 (MCP-1). Treatment with PQ decreased the translocation of nuclear factor (NF)-κB to the nucleus, and increased the nuclear translocation of nuclear factor erythroid-2-related factor 2 (Nrf2) and the expression of HO-1. PQ also inhibited the activation of p38 in the LPS-stimulated RAW 264.7 cells. Taken together, our findings demonstrate that PQ exerts anti-inflammatory effects against LPS-induced ALI, and that these effects are associated with the modulation of iNOS, HO-1, NF-κB and MAPK signaling. Therefore, we suggest that PQ has therapeutic potential for use in the treatment of ALI.