hESCs, derived from the inner cell mass of the pre-implantation blastocyst, are defined by their ability to selfrenew and to differentiate into all types of mature cells. 29, 30 Although these cells and their derivatives in different stages of differentiation have been used for cell therapy applications in animal models of cardiovascular disease, 31-33 peripheral vascular disease, 12, 34 and central nervous system disorders, 21, 22, 35, 36 their potential in preventing sepsis-induced lung inflammatory injury characteristic of adult respiratory distress syndrome has not been addressed. The present study demonstrates for the first time the role of a population of progenitor cells derived from hESCs in preventing lung inflammatory injury induced by sepsis and improving survival in mice. The results show that the protection is the result of the subset of cells that are ACEϩ to respond to LPS by producing eNOS-derived NO. These cells functioned by moderating the pro-inflammatory cytokine production of the host immune CD11bϩ cells and reducing the high output of iNOS-derived NO cells and thereby mitigating lung inflammatory injury.