Acute lung injury (ALI) is a life-threatening condition triggered by pneumonia, viral infections, or physical trauma. It manifests clinically as progressive respiratory failure and refractory hypoxemia. Using a lipopolysaccharide (LPS)-induced acute lung injury mouse model, we demonstrated that amniotic mesenchymal stem cells (AMSCs) exhibit robust reparative and anti-inflammatory properties. Our analysis encompassed inflammatory mediators; histological damage; tight junction integrity; epithelial–mesenchymal transition (EMT); and the TGF-β/Smad, TLR4/NF-κB/MAPK, pyroptosis, and apoptosis signaling pathways. Our key results demonstrated that in ALI-afflicted mice, AMSCs exhibited targeted pulmonary tropism, homing in on injured alveolar regions, where they restored the morphology and functionality of damaged tissues and organelles, re-established lung barrier function, and attenuated the aberrantly activated TLR4/NF-κB/MAPK and TGF-β/Smad pathways associated with inflammation. These coordinated mechanisms contributed to pyroptosis, apoptosis, and fibrosis suppression. In conclusion, AMSCs mitigated the inflammatory injury process in ALI mice through multiple mechanisms, thereby supporting the potential development of MSC-based therapeutic strategies.