Rationale- Endothelial thrombomodulin (TM) regulates thrombosis and inflammation. Diverse forms of pulmonary and vascular injury are accompanied by downregulation of TM, which aggravates tissue injury. We postulated that anchoring TM to the endothelial surface would restore its protective functions. Objective- To design an effective and safe strategy to treat pulmonary thrombotic and inflammatory injury. Methods- We synthesized a fusion protein, designated scFv/TM, by linking the extracellular domain of mouse TM to a single-chain variable fragment of an antibody to Platelet Endothelial Cell Adhesion Molecule-1 (PECAM-1). The targeting and protective functions of scFv/TM were tested in mouse models of lung ischemia-reperfusion and acute lung injury caused by intratracheal endotoxin and hyperoxia, both of which caused ~50% reduction in the endogenous expression of TM. Measurement and Results- Biochemical assays showed that scFv/TM accelerated protein C activation by thrombin and bound mouse PECAM-1 and cytokine high mobility group-B1 (HMGB1). After intravenous injection, scFv/TM preferentially accumulated in the mouse pulmonary vasculature. In a lung model of ischemia-reperfusion injury, scFv/TM attenuated elevation of early growth response-1, inhibited pulmonary deposition of fibrin and leukocyte infiltration, and preserved blood oxygenation more effectively than soluble TM. In an acute lung injury model, scFv/TM, but not soluble TM, suppressed activation of nuclear factor-B, inflammation and edema in the lung and reduced mortality without causing hemorrhage. Conclusions- Targeting TM to the endothelium using an scFv anchor enhances its anti-thrombotic and anti-inflammatory effectiveness in models of acute lung injury.