Hypoxemia can occur during one-lung ventilation (OLV) in thoracic surgery, leading to perioperative complications. Inhaled iloprost is a selective pulmonary vasodilator with efficacy in patients with pulmonary hypertension. The purpose of this study was to evaluate the effects of off-label inhaled iloprost on oxygenation during OLV in patients undergoing lung surgery. Seventy-two patients who were scheduled for elective video-assisted thoracoscopic lobectomy were assigned to receive an inhaled nebulizer of distilled water (control group), 10 μg iloprost (IL10 group), or 20 μg iloprost (IL20 group). Arterial and venous blood gas and hemodynamic analyses were obtained. Changes in partial pressure of oxygen in arterial blood (PaO2), after the initiation of OLV and the resumption two-lung ventilation (TLV), were similar in all three groups. However, PaO2 in the IL10 group was comparable to that in the control group, whereas PaO2 in the IL20 group was significantly higher than that in the control group at 10, 20, and 30 min after administration of iloprost (275.1 ± 50.8 vs. 179.3 ± 38.9, p < 0.0001; 233.9 ± 39.7 vs. 155.1 ± 26.5, p < 0.0001; and 224.6 ± 36.4 vs. 144.0 ± 22.9, p < 0.0001, respectively). The shunt fraction in the IL20 group was significantly higher than that in the control group after administration of iloprost (26.8 ± 3.1 vs. 32.2 ± 3.4, p < 0.0001; 24.6 ± 2.2 vs. 29.9 ± 3.4, p < 0.0001; and 25.3 ± 2.0 vs. 30.8 ± 3.1, p < 0.0001, respectively). Administration of inhaled iloprost during OLV improves oxygenation and decreases intrapulmonary shunt.