There is a trend to use nanoparticles as distinct treatments for cancer treatment because they have overcome many of the limitations of traditional drug delivery systems. Gallic acid (GA) is an effective polyphenol in the treatment of tissue injuries. In this study, GA was loaded onto niosomes to produce gallic acid nanoemulsion (GANE) using a green synthesis technique. GANE's efficiency, morphology, UV absorption, release, and Fourier-transform infrared spectroscopy (FTIR) analysis were evaluated. An in vitro study was conducted on the A549 lung carcinoma cell line to determine the GANE cytotoxicity. Also, our study was extended to evaluate the protective effect of GANE against lipopolysaccharide (LPS)-induced pulmonary fibrosis in rats. GANE showed higher encapsulation efficiency and strong absorption at 280 nm. Transmission electron microscopy presented a spherical shape of the prepared nanoparticles, and FTIR demonstrated different spectra for the free gallic acid sample compared to GANE. GANE showed cytotoxicity for the A549 carcinoma lung cell line with a low IC 50 value. It was found that oral administration of GANE at 32.8 and 82 mg/kg.b.w. and dexamethasone (0.5 mg/kg) provided significant protection against LPS-induced pulmonary fibrosis. GANE enhanced production of superoxide dismutase, GPx, and GSH. It simultaneously reduced the MDA level. The GANE and dexamethasone, induced the production of IL-4, but suppressed TNF-α and IL-6. On the other hand, the lung p38MAPK, TGF-β1, and NF-κB gene expression was downregulated in rats administrated with GANE when compared with the LPS-treated rats. Histological studies confirmed the effective effect of GANE as it had a lung-protective effect against LPS-induced lung fibrosis. It was noticed that GANE can inhibit oxidative stress, lipid peroxidation, and cytokines and downregulate p38MAPK, TGF-β1, and NF-κB gene expression to suppress the proliferation and migration of lung fibrotic cells.