A 64-year-old man was admitted to our hospital because of fever and dyspnea with marked hypoxemia and diffuse ground-glass opacities in bilateral lung fields revealed by a chest CT scan. He had used etanercept therapy for his rheumatoid arthritis. His PaO2/FiO2 had decreased to 130.4 Torr. On bronchoalveolar lavage, lymphocytes were elevated to 54.4% and bacteria culture was negative. We diagnosed drug-induced pneumonitis caused by etanercept, clinically and started high dose corticosteroid therapy. Despite his severe hypoxemia, the corticosteroid therapy and use of non-invasive positive pressure ventilation improved his condition. Interstitial lung disease induced by etanercept is rare, and a severe case requiring mechanical ventilation has never been reported. Because of the critical condition it can cause, it is suggested that evaluation of interstitial pneumonia is crucial.