Endothelial cell (EC) activation and vascular injury are hallmark features of Acute Lung Injury and Acute Respiratory Distress Syndrome (ALI/ARDS). Caveolin-1 (Cav-1) is highly expressed in pulmonary microvascular ECs and plays a key role in maintaining vascular homeostasis. The aim of this study was to determine whether the lung inflammatory response to Escherichia coli lipopolysaccharide (LPS) promotes priming of ECs via Cav-1 depletion and whether this contributes to the onset of pulmonary vascular remodeling. To test the hypothesis that depletion of Cav-1 primes ECs to respond to profibrotic signals, C57BL6 WT mice (Tie2.Cre^-;Cav1^lox/lox) were exposed to nebulized LPS (10 mg; 1 hr daily for 4 days) and compared to EC-specific Cav1^-/- (Tie2.Cre⁺;Cav1^lox/lox) After 96 hrs of LPS exposure, total lung Cav-1 and BMPRII expression were reduced in WT mice. Moreover, plasma albumin leakage, infiltration of immune cells, and levels of IL-6/IL-6R and TGF-β were elevated in both LPS-treated WT and EC-Cav1^-/- mice. Finally, EC-Cav1^-/- mice exhibited a modest increase in microvascular thickness basally and moreso upon exposure to LPS (96 hr). EC-Cav1^-/- mice and LPS treated WT mice exhibited reduced BMPRII expression and eNOS uncoupling, which along with increased TGF-β promoted TGFβRI-dependent SMAD-2/3 phosphorylation. Finally, human lung sections from patients with ARDS displayed reduced EC Cav-1 expression, elevated TGF-β levels, and severe pulmonary vascular remodeling. Thus, EC Cav-1 depletion, oxidative stress-mediated reduction in BMPRII expression, and enhanced TGFβ-driven SMAD-2/3 signaling promote pulmonary vascular remodeling in inflamed lungs.