The present study investigated the antifibrotic effect and its molecular mechanism of luteolin on lung fibrosis in both in vivo and in vitro models. C57BL/6J mice were administered a single intratracheal injection with bleomycin and then treated orally with luteolin. Lung inflammation was examined by direct counting inflammatory cell population and cytokine levels in the bronchoalveolar lavage fluid at day 7 and day 14. Antifibrotic effect of luteolin was determined by investigating histological changes, collagen contents and induction of TGF-β1 mRNA expression at day 21. To elucidate the antifibrotic mechanism of luteolin, the expression of α-SMA, collagen 1 and phosphorylated Smad3 protein were analysized by immunofluorescence staining and Western blotting in TGF-β1 stimulated primary mouse lung fibroblasts. The morphological changes as well as epithelial and mesenchymal marker were examined in TGF-β1-stimulated A549 cells. In vitro study showed that luteolin attenuated TGF-β1-induced α-SMA and collagen1 upregulation and Smad3 phosphorylation in mouse lung fibroblasts. Furthermore, TGF-β1 mediated E-cadherin downregulation as well as fibronectin and collagen 1 upregulation was significantly inhibited by luteolin in A549 cells. Our data suggest that luteolin may be useful as a therapy for pulmonary fibrosis and its antifibrotic effect at least partly through blockade of TGF-β1 signaling pathway. Luteolin dose-dependently inhibited the expression and production of these inflammatory genes and mediators in macrophages stimulated with LPS. Semi-quantitative reverse-transcription polymerase chain elongation reaction assay further confirmed the suppression of LPS-induced TNF-α,IL-6, iNOS and COX-2 gene expression by luteolin in a transcriptional level. Luteolin also reduced the DNA-binding activity of NF-kB in LPS-activated macrophages. Moreover, luteolin blocked the degradation of IkB-α and nuclear translocation of NF-kB p65 subunit. In addition, luteolin significantly inhibited the LPS-induced DNA binding activity of AP-1. We also found that luteolin attenuated the LPS-mediated Akt and IKK phosphorylation, as well as reactive oxygen species production. Our observations suggest a possible therapeutic application of this agent for treating inflammatory disorders in lung.