Posttranslational modification of the neural cell adhesion molecule (NCAM) by polysialic acid (polySia) is well studied in the nervous system and described as a dynamic modulator of plastic processes like precursor cell migration, axon fasciculation, and synaptic plasticity. Here, we describe a novel function of polysialylated NCAM (polySia-NCAM) in innate immunity of the lung. In mature lung tissue of healthy donors, polySia was exclusively attached to the transmembrane isoform NCAM-140 and located to intracellular compartments of epithelial cells. In patients with chronic obstructive pulmonary disease, however, increased polySia levels and processing of the NCAM carrier were observed. Processing of polysialylated NCAM was reproduced in a mouse model by bleomycin administration leading to an activation of the inflammasome and secretion of interleukin (IL)-1β. As shown in a cell culture model, polySia-NCAM-140 was kept in the late trans-Golgi apparatus of lung epithelial cells and stimulation by IL-1β or lipopolysaccharide induced metalloprotease-mediated ectodomain shedding, resulting in the secretion of soluble polySia-NCAM. Interestingly, polySia chains of secreted NCAM neutralized the cytotoxic activity of extracellular histones as well as DNA/histone-network-containing "neutrophil extracellular traps", which are formed during invasion of microorganisms. Thus, shedding of polySia-NCAM by lung epithelial cells may provide a host-protective mechanism to reduce tissue damage during inflammatory processes.