Introduction: We hypothesized extracellular vesicles (EVs) from preconditioned human-induced pluripotent stem cell-derived mesenchymal stem cells (iMSCs) attenuate LPS-induced acute lung injury (ALI) and endotoxemia. Methods: iMSCs were incubated with cell stimulation cocktail (CSC) and EVs were isolated. iMSC-EVs were characterized by size and EV markers. Biodistribution of intratracheal (IT), intravenous, and intraperitoneal injection of iMSC-EVs in mice was examined using IVIS. Uptake of iMSC-EVs in lung tissue, alveolar macrophages, and RAW264.7 cells was also assessed. C57BL/6 mice were treated with IT/IP iMSC-EVs or vehicle ± IT/IP LPS to induce ALI/acute respiratory distress syndrome and endotoxemia. Lung tissues, plasma, and bronchoalveolar lavage fluid (BALF) were harvested at 24 h. Lung histology, BALF neutrophil/macrophage, cytokine levels, and total protein concentration were measured to assess ALI and inflammation. Survival studies were performed using IP LPS in mice for 3 days. Results: iMSC-EV route of administration resulted in differential tissue distribution. iMSC-EVs were taken up by alveolar macrophages in mouse lung and cultured RAW264.7 cells. IT LPS-treated mice demonstrated marked histologic ALI, increased BALF neutrophils/macrophages and protein, and increased BALF and plasma TNF-α/IL-6 levels. These parameters were attenuated by 2 h before or 2 h after treatment with IT iMSC-EVs in ALI mice. Interestingly, the IT LPS-induced increase in IL-10 was augmented by iMSC-EVs. Mice treated with IP LPS showed increases in TNF-α and IL-6 that were downregulated by iMSC-EVs and LPS-induced mortality was ameliorated by iMSC-EVs. Administration of IT iMSC-EVs 2 h after LPS downregulated the increase in proinflammatory cytokines (TNF-α/IL-6) by LPS and further increased IL-10 levels. Conclusions: iMSC-EVs attenuate the inflammatory effects of LPS on cytokine levels in ALI and IP LPS in mice. LPS-induced mortality was improved with administration of iMSC-EVs.