Thyroid hormone (TH) is critical for the maintenance of cellular homeostasis during stress responses, but its role in lung fibrosis is unknown. Here we found that the activity and expression of iodothyronine deiodinase 2 (DIO2), an enzyme that activates TH, were higher in lungs from patients with idiopathic pulmonary fibrosis than in control individuals and were correlated with disease severity. We also found that Dio2-knockout mice exhibited enhanced bleomycin-induced lung fibrosis. Aerosolized TH delivery increased survival and resolved fibrosis in two models of pulmonary fibrosis in mice (intratracheal bleomycin and inducible TGF-β1). Sobetirome, a TH mimetic, also blunted bleomycin-induced lung fibrosis. After bleomycin-induced injury, TH promoted mitochondrial biogenesis, improved mitochondrial bioenergetics and attenuated mitochondria-regulated apoptosis in alveolar epithelial cells both in vivo and in vitro. TH did not blunt fibrosis in Ppargc1a- or Pink1-knockout mice, suggesting dependence on these pathways. We conclude that the antifibrotic properties of TH are associated with protection of alveolar epithelial cells and restoration of mitochondrial function and that TH may thus represent a potential therapy for pulmonary fibrosis.