Background: An efficacious medical therapy for idiopathic pulmonary fibrosis (IPF) remains elusive. Purpose: To explore the efficacy and safety of etanercept in the treatment of IPF. Methods: Randomized, prospective, double-blind, placebo-controlled, multicenter, exploratory trial in subjects with clinically progressive IPF. Primary endpoints included changes in the percentage of predicted forced vital capacity (FVC%) and lung diffusing capacity for carbon monoxide corrected for hemoglobin (D_LCO_C) and change in the alveolar to arterial oxygen pressure difference [P(A-a)O₂] at rest from baseline over 48 weeks. Results: Eighty-eight subjects received subcutaneous etanercept (25 mg) or placebo twice weekly as their sole treatment for IPF. No differences in baseline demographics or disease status were detected between treatment groups; the mean time from first diagnosis was 13.6 months and mean FVC 63.9% of predicted. At 48 weeks, no significant differences in efficacy endpoints were observed between the groups. A nonsignificant reduction in disease progression was seen in several physiologic, functional, and quality of life endpoints among subjects receiving etanercept. There was no difference in adverse events between treatment groups. Conclusion: In this exploratory study in patients with clinically progressive IPF, etanercept was well tolerated. While there were no differences in the predefined endpoints, a decreased rate of disease progression was observed on several measures. Further evaluation of TNF antagonists in the treatment of IPF may be warranted. Clinical trials registration available at: www.clinicaltrails.gov, i.d. code = NCT00063869