Peroxiredoxin 6 (Prdx6) is a multifunctional enzyme that serves important antioxidant roles by scavenging hydroperoxides and reducing peroxidized cell membranes. Prdx6 also plays a key role in cell signaling by activating the NADPH oxidase, type 2 (Nox2) through its acidic Ca2+-independent phospholipase A2 (aiPLA2) activity. Nox2 generation of O2·−, in addition to signaling, can contribute to oxidative stress and inflammation such as during sepsis-induced acute lung injury (ALI). To evaluate a possible role of Prdx6-aiPLA2 activity in the pathophysiology of ALI associated with a systemic insult, wild-type (WT) and Prdx6-D140A mice, which lack aiPLA2 but retain peroxidase activity were administered intraperitoneal LPS. LPS-treated mutant mice had increased survival compared with WT mice while cytokines in lung lavage fluid and lung VCAM-1 expression, nitrotyrosine levels, PMN infiltration, and permeability increased in WT but not in mutant mice. Exposure of mouse pulmonary microvascular endothelial cells in primary culture to LPS promoted phosphorylation of Prdx6 and its translocation to the plasma membrane and increased aiPLA2 activity as well as increased H2O2 generation, nitrotyrosine levels, lipid peroxidation, NF-κB nuclear localization, and nucleotide-binding domain, leucine-rich-containing family, pyrin domain-containing-3 (NLRP3) inflammasome assembly; these effects were not seen in Nox2 null cells, Prdx6-D140A cells, or WT cells pretreated with MJ33, an inhibitor of aiPLA2 activity. Thus aiPLA2 activity is needed for Nox2-derived oxidant stress associated with LPS exposure. Since inactivation of aiPLA2 reduced mortality and prevented lung inflammation and oxidative stress in this animal model, the aiPLA2 activity of Prdx6 could be a novel target for prevention or treatment of sepsis-induced ALI.