Acute Respiratory Distress Syndrome (ARDS) is a fatal illness with high mortality rate of around 40% and is characterized by increased pulmonary vascular permeability resulting in inflammatory lung injury, loss of aerated lung tissue and severe hypoxia. Disruption of capillary endothelial- and alveolar epithelial-barrier marks the exudative phase of ARDS. Fate of an injured lung can either progress towards injury resolution or severe fibroproliferation leading to irreversible damage to the lungs. The objective of this project is to provide stage-specific therapeutic targets to prevent pulmonary edema in the exudative phase and enhance injury resolution in the fibrotic phase of ARDS. Using LPS induced lung injury model in vivo and LPS treatment on lung endothelial cells in vitro, we showed that LPS inhibits endothelial Akt and thus activates FoxO1/3a leading to the loss of tight-junction protein claudin5 expression and enhanced MMP3 expression/activity. Targeting FoxO1/3a and MMP3 protected from LPS-induced lung injury. Interestingly, we observed that lung MMP3 activity correlates with extent of lung injury. To further confirm the utility of MMP3 activity as a diagnostic marker for ARDS, MMP3 activity in human serum & plasma samples from ARDS patients were compared with controls. We found ~3-5-fold increase in MMP3 activity in ARDS patients. On the other end, regulatory T-cell (Treg)-mediated resolution of lung injury and prevention of fibroproliferation has been reported. However, molecular mechanisms to enhance quantity of Tregs after lung injury are yet to be explored. Here we show the importance of inhibiting Akt, 48 hours after lung injury, to enhance FoxOs mediated increase in FoxP3 expressing Tregs and injury resolution. Together, these results indicate that endothelial Akt activity inhibition in the exudative stage is deleterious as it enhances pulmonary edema, while the T-cell Akt activity inhibition in fibrotic phase is beneficial as it enhances Treg-mediated resolution of lung injury. Overall, FoxOs and MMP3 could be potential therapeutic targets in high risk patients to prevent exudation and pulmonary edema while Akt could be an important target to enhance resolution during fibrotic phase of ARDS.