Acute respiratory distress syndrome (ARDS) is a syndrome characterized by the rapid influx of protein-rich edema fluid into the air spaces. The magnitude of alveolar epithelial cell injury is a key determinant of disease severity and an important predictor of patient outcome. The alveolar epithelium is positioned at the interface of the host response in the initiation, progression, and recovery phase of the disease. Keratinocyte growth factor (KGF) is a potent survival factor unique to the epithelium that promotes lung epithelial cell survival, accelerates wound closure, and reduces fibrosis. We therefore hypothesized that KGF preserves lung function by inhibiting apoptosis through activation of a signal transduction pathway responsible for cell survival. To test this hypothesis we determined that KGF inhibits death following Fas activation, a relevant apoptosis pathway, and then determined that cell survival is mediated through activation of the phosphatidylinositol 3'-kinase (PI3K)/Akt kinase signal transduction pathway. We found that KGF induces a dose- and time-dependent increase in Akt kinase activity and that, as expected, activation of Akt via KGF is PI3K dependent. KGF inhibited Fas-induced apoptosis as measured by a reduction in apoptotic cells and caspase-3 activity. This investigation supports our original hypothesis that KGF protects the lung epithelium by inhibiting apoptosis and that protection occurs through activation of PI3K/Akt-mediated cell survival pathway. Our results are in agreement with other reports that identify the PI3K/Akt axis as a key intracellular pathway in the lung epithelium that may serve as a therapeutic target to preserve epithelial integrity during inflammation.