MDL 201,404YA (alternatively, CE-1037), a potent selective inhibitor of human neutrophil elastase (HNE), was tested both intratracheally and intravenously for its activity at inhibiting HNE. MDL 201,404YA given either i.t. or i.v. was effective in preventing the pulmonary hemorrhage which occurred after intratracheal instillation of HNE. Additional studies with MDL 201,404YA suggested that this compound remained active in the lung environment for at least 6 hours. Further evaluation of MDL 201,404YA suggested that it could inhibit the ongoing proteolysis caused by HNE when given 15 minutes after the initial HNE challenge. These data suggest that MDL 201,404YA may be effective therapeutically in treating conditions which result from an imbalance between elastase and its endogenous inhibitor alpha-1-proteinase inhibitor (alpha 1-PI).