Acute lung injury (ALI) carries a high mortality in critically ill patients. Recent reports correlate elevated concentrations of endothelium-derived microparticles (EMPs) with diseases of endothelial dysfunction. Many of these diseases have ALI sequelae. We hypothesize that EMPs contribute to endothelial cell (EC) dysfunction and development of ALI. To test this hypothesis, we treated isolated vessels with EMPs and examined changes in vasodilation. Endothelial cell cultures were incubated with EMPs and examined for changes in stimulated nitric oxide (*NO) production and nitric oxide synthase (eNOS) activation. Finally, EMPs were injected into rats and mice and lungs examined for ALI. In both mouse and human ex vivo vessel preparations, we found a marked attenuation of endothelium-mediated vasodilation after EMP treatment (4 x 10(6)/mL). This dysfunction was not corrected by pretreatment of EMPs with free radical scavengers. Coincubation of EMPs with EC cultures yielded a three-fold reduction in A23187-stimulated *NO release. Western analysis of these cells showed a corresponding decrease in eNOS phosphorylation at Ser1179 and a decrease in hsp90 association. Measurements of lung permeability, myeloperoxidase activity, and histology of EMPs-treated Brown Norway rats demonstrated pulmonary edema, neutrophil recruitment, and compromise of the endothelial-alveolar barrier as a second hit phenomenon. In C57BL/6 mice, exogenous EMPs caused a significant rise in pulmonary capillary permeability both as a primary and secondary injury. These findings demonstrate EMPs are capable of inducing significant lung injury at pathophysiologically relevant concentrations. Endothelium-derived microparticles inhibit endothelium-mediated vasodilation and *NO generation from eNOS. Once elucidated, EMP mechanisms of inducing ALI and endothelial dysfunction may present new therapeutic targets.