Sepsis-induced acute lung injury is a common clinical disorder in critically ill patients that is associated with high mortality. In this study, we investigated the role of p120-catenin (p120), a constituent of endothelial adherens junctions, in regulating the innate immune function of lungs. In mice in which acute lung injury was induced by i.p. administration of LPS, we observed a rapid decrease in the expression of p120 in lungs. The p120 protein expression was correlated inversely with severity of inflammation. Suppression of p120 expression in lung endothelial cells in mice using small interfering RNA resulted in high sensitivity to endotoxin and greatly increased the mortality compared with controls. Knockdown of p120 also increased the expression of ICAM-1, neutrophil recruitment, production of cytokines TNF-α and IL-6, pulmonary transvascular protein permeability, and lung water content in response to LPS. We demonstrated that endothelial p120 modulates lung innate immune function by interfering with the association of TLR4 with its adaptor MyD88 to block TLR4 signaling and NF-κB activation in endothelial cells. In conclusion, these studies have uncovered a novel innate immune function of endothelial p120 in downregulating the lung inflammatory response to endotoxin through the suppression of TLR4 signaling.