The protective mechanism of hypoxic pulmonary vasoconstriction during one-lung ventilation (OLV) is impaired in patients with a low diffusing capacity for carbon monoxide (DLCO). We hypothesized that iloprost inhalation would improve oxygenation and lung mechanics in patients with low DLCO who underwent pulmonary resection. Forty patients with a DLCO < 75% were enrolled. Patients were allocated into either an iloprost group (ILO group) or a control group (n = 20 each), in which iloprost and saline were inhaled, respectively. The partial pressure of arterial oxygen/fraction of inspired oxygen (PaO2/FiO2) ratio, pulmonary shunt fraction, alveolar dead space, dynamic compliance, and hemodynamic parameters were assessed 20 min after the initiation of OLV and 20 min after drug administration. Repeated variables were analyzed using a linear mixed model between the groups. Data from 39 patients were analyzed. After iloprost inhalation, the ILO group exhibited a significant increase in the PaO2/FiO2 ratio and a decrease in alveolar dead space compared with the control group (p = 0.025 and p = 0.042, respectively). Pulmonary shunt, dynamic compliance, hemodynamic parameters, and short-term prognosis were comparable between the two groups. Selective iloprost administration during OLV reduced alveolar dead space and improved oxygenation while minimally affecting hemodynamics and short-term prognosis.