Acute lung injury (ALI) remains a serious health issue with little improvement in our understanding of the pathophysiology and therapeutic approaches. We investigated the mechanism that lipopolysaccharide (LPS) induces early neutrophil recruitment to lungs and increases pulmonary vascular permeability during ALI. Intratracheal LPS induced release of pro-interleukin-1α (IL-1α) from necrotic alveolar macrophages (AM), which activated endothelial cells (EC) to induce vascular leakage via loss of vascular endothelial (VE)-cadherin. LPS triggered the AM purinergic receptor P2X7(R) to induce Ca2+ influx and ATP depletion, which led to necrosis. P2X7R deficiency significantly reduced necrotic death of AM and release of pro-IL-1α into the lung. CD14 was required for LPS binding to P2X7R, as CD14 neutralization significantly diminished LPS induced necrotic death of AM and pro-IL-1α release. These results demonstrate a key role for pro-IL-1α from necrotic alveolar macrophages in LPS-mediated ALI, as a critical initiator of increased vascular permeability and early neutrophil infiltration.