The molecular mechanisms by which the endothelial barrier becomes compromised during lipopolysaccharide (LPS) mediated acute lung injury (ALI) are still unresolved. We have previously reported that the disruption of the endothelial barrier is due, at least in part, to the uncoupling of endothelial nitric oxide synthase (eNOS) and increased peroxynitrite-mediated nitration of RhoA. The purpose of this study was to elucidate the molecular mechanisms by which LPS induces eNOS uncoupling during ALI. Exposure of pulmonary endothelial cells (PAEC) to LPS increased pp60Src activity and this correlated with an increase in nitric oxide (NO) production, but also an increase in NOS derived superoxide, peroxynitrite formation and 3-nitrotyrosine (3-NT) levels. These effects could be simulated by the over-expression of a constitutively active pp60Src (Y527FSrc) mutant and attenuated by over-expression of dominant negative pp60Src mutant or reducing pp60Src expression. LPS induces both RhoA nitration and endothelial barrier disruption and these events were attenuated when pp60Src expression was reduced. Endothelial NOS uncoupling correlated with an increase in the levels of asymmetric dimethylarginine (ADMA) in both LPS exposed and Y527FSrc over-expressing PAEC. The effects in PAEC were also recapitulated when we transiently over-expressed Y527FSrc in the mouse lung. Finally, we found that the pp60-Src-mediated decrease in DDAH activity was mediated by the phosphorylation of DDAH II at Y207 and that a Y207F mutant DDAH II was resistant to pp60Src-mediated inhibition. We conclude that pp60Src can directly inhibit DDAH II and this is involved in the increased ADMA levels that enhance eNOS uncoupling during the development of ALI.