Oxidative stress contributes to the pathogenesis of acute lung injury. Protein S-glutathionylation plays an important role in cellular antioxidant defense. Here we report that the expression of deglutathionylation enzyme Grx1 is decreased in the lungs of acute lung injury mice. The acute lung injury induced by hyperoxia or LPS is significantly relieved in Grx1 KO and Grx1^fl/flLysM^cre mice, confirming the protective role of Grx1-regulated S-glutathionylation in macrophages. Using a quantitative redox proteomics approach, we show that FABP5 is susceptible to S-glutathionylation under oxidative conditions. S-glutathionylation of Cys127 in FABP5 promotes its fatty acid binding ability and nuclear translocation. Further results indicate S-glutathionylation promotes the interaction of FABP5 and PPARβ/δ, activates PPARβ/δ target genes and suppresses the LPS-induced inflammation in macrophages. Our study reveals a molecular mechanism through which FABP5 S-glutathionylation regulates macrophage inflammation in the pathogenesis of acute lung injury.