The incidence and mortality of acute lung injury (ALI)/acute respiratory distress syndrome (ARDS) are still very high, but stem cells show some promise for its treatment. Here we found that intratracheal administration of human umbilical cord-mesenchymal stem cells (UC-MSCs) significantly improved survival and attenuated the lung inflammation in lipopolysaccharide (LPS)-induced ALI mice. We also used the proteins-chip and bioinformatics to analyze interactions between UC-MSCs treatment and immune-response alternations of ALI mice. Then we demonstrated that UC-MSCs could inhibit the inflammatory response of mouse macrophage in ALI mice, as well as enhance its IL-10 expression. We provide data to support the concept that the therapeutic capacity of UC-MSCs for ALI was primarily through paracrine secretion, particularly of prostaglandin-E2 (PGE2). Furthermore, we showed that UC-MSCs might secrete a panel of factors including GM-CSF, IL-6 and IL-13 to ameliorate ALI. Our study suggested that UC-MSCs could protect LPS-induced ALI model by immune regulation and paracrine factors, indicating that UC-MSCs should be a promising strategy for ALI/ARDS.