Bronchial circulation plays a critical role in the pathophysiology of burn and smoke inhalation–induced acute lung injury. A 10-fold increase in bronchial blood flow is associated with excessive production of nitric oxide (NO) following smoke inhalation and cutaneous burn. Because an increased release of neuropeptides from the airway has been implicated in smoke inhalation injury, we hypothesized that direct delivery into the bronchial artery of low-dose 7-nitroindazole (7-NI), a specific neuronal NO synthase inhibitor, would attenuate smoke/burn-induced acute lung injury. Eighteen adult female sheep were instrumented for chronic hemodynamic monitoring 5 to 7 days before the injury. The bronchial artery was cannulated via intercostal thoracotomy, while blood flow was preserved. Acute lung injury was induced by 40% total body surface area third-degree cutaneous burn and smoke inhalation (48 breaths of cotton smoke, <40°C) under deep anesthesia. Following injury, animals (35.4 ± 1.1 kg) were divided into three groups: (a) 7-NI group: 1 h after injury, 7-NI (0.01 mg · kg−1 · h−1, 2 mL · h−1) was continuously infused into the bronchial artery, n = 6; (b) control group: 1 h after injury, same amount of saline was injected into the bronchial artery, n = 6; (c) sham group: no injury, no treatment, same operation and anesthesia, n = 6. After injury, all animals were ventilated and fluid resuscitated according to an established protocol. The experiment was conducted for 24 h. Injury induced severe pulmonary dysfunction, which was associated with increases in lung edema formation, airway obstruction, malondialdehyde, and nitrate/nitrite. 7-Nitroindazole injection into the bronchial artery reduced the degree of lung edema formation and improved pulmonary gas exchange. The increase in malondialdehyde and nitrate/nitrite in lung tissue was attenuated by treatment. Our data strongly suggest that local airway production of NO contributes to pulmonary dysfunction following smoke inhalation and burn injury. Most mechanisms that drive this pathophysiology reside in the airway.