Sulfur mustard (SM) is a highly toxic war chemical that causes significant morbidity and mortality and lacks any effective therapy. Rats exposed to aerosolized CEES (2-chloroethyl ethyl sulfide; 10% in ethanol), an analog of SM, developed acute respiratory distress syndrome (ARDS), which is characterized by increased inflammation, hypoxemia and impaired gas exchange. We observed elevated levels of extracellular nucleic acids (eNA) in the bronchoalveolar lavage fluid (BALF) of CEES-exposed animals. eNA can induce inflammation, coagulation and barrier dysfunction. Treatment with hexadimethrine bromide (HDMBr; 10 mg/kg), an eNA neutralizing agent, 2 h post-exposure, reduced lung injury, inhibited disruption of alveolar–capillary barrier, improved blood oxygenation (PaO2/FiO2 ratio), thus reversing ARDS symptoms. HDMBr treatment also reduced lung inflammation in the CEES-exposed animals by decreasing IL-6, IL-1A, CXCL-1 and CCL-2 mRNA levels in lung tissues and HMGB1 protein in BALF. Furthermore, HDMBr treatment also reduced levels of lung tissue factor and plasminogen activator inhibitor-1 indicating reduction in clot formation and increased fibrinolysis. Fibrin was reduced in BALF of the HDMBr-treated animals. This was further confirmed by histology that revealed diminished airway fibrin, epithelial sloughing and hyaline membrane in the lungs of HDMBr-treated animals. HDMBr completely rescued the CEES-associated mortality 12 h post-exposure when the survival rate in CEES-only group was just 50%. Experimental eNA treatment of cells caused increased inflammation that was reversed by HDMBr. These results demonstrate a role of eNA in the pathogenesis of CEES/SM-induced injury and that its neutralization can serve as a potential therapeutic approach in treating SM toxicity.