We compared survival and the intensity of bronchoalveolar inflammation reflected by lung lavage after the intraperitoneal injection of endotoxin from Escherichia coli serotype 055B5 in rats breathing air and those breathing 60% oxygen for six days after endotoxin injection. Survival following 7.5 mg/kg of endotoxin was comparable in air‐breathing rats (50%) and in oxygen‐breathing rats (63%). Endotoxin caused a dose‐dependent increase in the recovery of polymorphonuclear leukocytes from the lung. Oxygen breathing reduced the percentage of neutrophils recovered by lavage 24 hr after endotoxin from 17% to 9% after 2.5 mg/kg of endotoxin and from 34% to 12% after 7.5 mg/kg of endotoxin. The absolute number of neutrophils recovered was also significantly decreased in oxygen‐breathing rats. The activity of pulmonary angiotensin‐ converting enzyme (ACE) has been reported to be affected by oxygen tension, and ACE degrades bradykinin, a proinflammatory mediator. Therefore, we questioned whether the salutary effect of increased inspired oxygen tension on the magnitude of neutrophil influx into the airspaces could be related to changes in ACE activity. We found that after 48 hr of peroral pretreatment of the rats with captopril, a specific ACE inhibitor, there was increased recovery of neutrophils by lavage 24 hr after injection of endotoxin in air‐breathing rats. Captopril pretreatment also increased the chemotactic activity of bronchoalveolar lavage fluid (BALF). There was no concomitant alteration in the accumulation of125l albumin in the lung following captopril pretreatment either in endotoxin‐treated rats or in controls. Thus, breathing 60% oxygen decreased the accumulation of neotrophils in airspaces after intraperitoneal endotoxin injection and pharmacologic inhibition of ACE had the opposite effect. Alterations in the activity of pulmonary angiotensin‐converting enzyme related to alveolar oxygen tension is a potential speculative mechanism for modulation of alveolar inflammation by the inspired oxygen concentration in this model.