Acute respiratory distress syndrome (ARDS), a catastrophic illness of multifactorial etiology, involves a rapid upsurge in inflammatory cytokines that leads to hypoxemic respiratory failure. Dexamethasone, a synthetic corticosteroid, mitigates the glucocorticoid-receptor-mediated inflammation and accelerates tissue homeostasis towards disease resolution. To minimize non-target organ side effects arising from frequent and chronic use of dexamethasone, we designed biodegradable, lung-targeted microspheres with sustained release profiles. Dexamethasone-loaded lipopolymeric microspheres of PLGA (Poly Lactic-co-Glycolic Acid) and DPPC (Dipalmitoylphosphatidylcholine) stabilized with vitamin E TPGS (D-α-tocopheryl polyethylene glycol succinate) were prepared by a single emulsion technique that had a mean diameter of 8.83 ± 0.32 μm and were spherical in shape as revealed from electron microscopy imaging. Pharmacokinetic and biodistribution patterns studied in the lungs, liver, and spleen of Wistar rats showed high selectivity and targeting efficiency for the lung tissue (re 13.98). As a proof-of-concept, in vivo efficacy of the microspheres was tested in the lipopolysaccharide-induced ARDS model in rats. Inflammation markers such as IL-1β, IL-6, and TNF-α, quantified in the bronchoalveolar lavage fluid indicated major improvement in rats treated with dexamethasone microspheres by intravenous route. Additionally, the microspheres substantially inhibited the protein infiltration, neutrophil accumulation and lipid peroxidation in the lungs of ARDS bearing rats, suggesting a reduction in oxidative stress. Histopathology showed decreased damage to the pulmonary tissue upon treatment with the dexamethasone-loaded microspheres. The multipronged formulation technology approach can thus serve as a potential treatment modality for reducing lung inflammation in ARDS. An improved therapeutic profile would help to reduce the dose, dosing frequency and, eventually, the toxicity.