Etanercept (Enbrel) is a drug targeted against tumor necrosis factor-α, which is increasingly being used in treatment of a variety of autoimmune disorders. It has been reported to have a relatively safe profile; reported reactions have been of minor to moderate severity and range from hypersensitivity reactions, serious infections, fulminant pneumonias, and lung nodules. We report a case of diffuse alveolar hemorrhage and acute lung injury probably related to its use in a patient with rheumatoid arthritis. A high index of suspicion for noninfectious pulmonary diseases should also be considered when a patient with autoimmune disease treated with etanercept presents with pulmonary infiltrates and hypoxia refractory to antibiotics. Flexible bronchoscopy with sequential lavage should be attempted to detect and confirm the diagnosis of diffuse alveolar hemorrhage even if the patient does not have hemoptysis.