During acute lung injury, nitric oxide (NO) exerts cytotoxic effects by reacting with superoxide radicals, yielding the reactive nitrogen species peroxynitrite (ONOO−). ONOO− exerts cytotoxic effects, among others, by nitrating/nitrosating proteins and lipids, by activating the nuclear repair enzyme poly(ADP-ribose) polymerase and inducing VEGF. Here we tested the effect of the ONOO− decomposition catalyst INO-4885 on the development of lung injury in chronically instrumented sheep with combined burn and smoke inhalation injury. The animals were randomized to a sham-injured group ( n = 7), an injured control group [48 breaths of cotton smoke, 3rd-degree burn of 40% total body surface area ( n = 7)], or an injured group treated with INO-4885 ( n = 6). All sheep were mechanically ventilated and fluid-resuscitated according to the Parkland formula. The injury-related increases in the abundance of 3-nitrotyrosine, a marker of protein nitration by ONOO−, were prevented by INO-4885, providing evidence for the neutralization of ONOO− action by the compound. Burn and smoke injury induced a significant drop in arterial Po2-to-inspired O2 fraction ratio and significant increases in pulmonary shunt fraction, lung lymph flow, lung wet-to-dry weight ratio, and ventilatory pressures; all these changes were significantly attenuated by INO-4885 treatment. In addition, the increases in IL-8, VEGF, and poly(ADP-ribose) in lung tissue were significantly attenuated by the ONOO− decomposition catalyst. In conclusion, the current study suggests that ONOO− plays a crucial role in the pathogenesis of pulmonary microvascular hyperpermeability and pulmonary dysfunction following burn and smoke inhalation injury in sheep. Administration of an ONOO− decomposition catalyst may represent a potential treatment option for this injury.