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Gram-negative (G-) bacteria are the leading cause of hospital-acquired pneumonia in the United States. The devastating damage caused by G- bacteria results from the imbalance of bactericidal effects and overwhelming inflammation. Despite decades of research, the underlying mechanisms by which runaway inflammation is developed remain incompletely understood. Clara Cell Protein 16 (CC16), also known as uteroglobin, is the major protein secreted by Clara cells and the most abundant protein in bronchoalveolar lavage fluid (BALF). However, the regulation and functions of CC16 during G- bacterial infection are unknown. In this study, we aimed to assess the regulation of CC16 in response to Klebsiella pneumoniae (K. pneu) and to investigate the role of CC16 in bronchial epithelial cells. After K. pneu infection, we found that CC16 mRNA expression was significantly decreased in bronchial epithelial cells. Our data also showed that K. pneu infection upregulated cytokine and chemokine genes, including IL-1β, IL-6, and IL-8 in BEAS-2B cells. Endogenously overexpressed CC16 in BEAS-2B cells provided an anti-inflammatory effect by reducing these markers. We also observed that endogenous CC16 can repress NF-κB reporter activity. In contrast, the recombinant CC16 (rCC16) did not show an anti-inflammatory effect in K. pneu-infected cells or suppression of NF-κB promoter activity. Moreover, the overexpression of CC16 reduced reactive oxygen species (ROS) levels and protected BEAS-2B cells from K. pneu-induced apoptosis.