In response to infectious and, in some instances, noninfectious insults, the affected tissues/cells of the host undergo inflammation. However, uncontrolled inflammation could be detrimental to the host, resulting in inflammatory disease, such as inflammatory lung disease. Although the etiology of the disease is well defined, the underling pathogenesis is still incompletely understood. The renin–angiotensin system (RAS), one of the primary cardiovascular regulatory systems, has been proposed to be involved in the pathogenesis of inflammatory lung disease. In particular, the RAS has been implicated as advances in the understanding of the multifunctionality of individual components of the system have been made, and by the fact that the RAS acts not only systemically, but also locally in a variety of tissues, including the lung. Angiotensin-converting enzyme 2 (ACE2), a relatively new member of the RAS, has drawn extensive attention since 2003, because of the findings that ACE2 is the receptor for SARS Corona virus and that maintenance of normal ACE2 levels in the lung is beneficial for the host to combat inflammatory lung disease. Nevertheless, the mechanism through which ACE2 plays a role in inflammatory lung disease has not been clearly identified. In an attempt to summarize current literature findings and progress made in uncovering the role of ACE2 in inflammatory lung disease, this review will focus on recent studies examining pulmonary ACE2 biology, its roles in inflammatory lung disease pathogenesis and possible underlying mechanisms. Finally, we will discuss pulmonary ACE2 as a potential therapeutic target for inflammatory lung disease.