Idiopathic pulmonary fibrosis (IPF) is a relentlessly progressive disease harboring significant morbidity and mortality despite recent advances in therapy. Regardless of disease severity acute exacerbations (IPF-AEs) may occur leading to considerable loss of function and are the leading cause of death in IPF. Histologic features of IPF-AE are very similar to acute respiratory distress syndrome (ARDS), but the underlying mechanisms are incompletely understood. We investigated the role of the NLRP3 inflammasome in IPF and IPF-AE. Bronchoalveolar lavage (BAL) cells were sampled from patients with IPF (n = 32), IPF-AE (n = 10), ARDS (n = 7) and healthy volunteers (HV, n = 37) and the NLRP3-inflammasome was stimulated . We found the NLRP3 inflammasome to be hyper-inducible in IPF compared to HV with increased IL-1ß and pro-IL-1ß levels on ELISA upon stimulation as well as increased caspase-1 activity measured by caspase-1p20 immunoblotting. In IPF-AE, IL-1ß was massively elevated to an extent similar to ARDS. To evaluate potential mechanisms, we co-cultured BAL cells with radiated A549 cells (a model to simulate apoptotic alveolar epithelial cells), which led to increased NLRP3 mRNA expression and increased caspase-1 dependent IL-1ß production. In the presence of a reactive oxygen species (ROS) inhibitor (diphenyleneiodonium) and a cathepsin B inhibitor (E64D), NLRP3 expression was suppressed indicating that induction of NLRP3 activation following efferocytosis of apoptotic A549 cells is mediated ROS and cathepsin-B. In summary, we present evidence of involvement of the NLRP3 inflammasome-caspase pathway in the pathogenesis of IPF-AE, similarly to ARDS, which may be mediated by efferocytosis of apoptotic alveolar epithelial cells in IPF.