Sulfur mustard (SM), a bifunctional alkylating agent that causes severe lung damage, is a significant threat to both military and civilian populations. The mechanisms mediating the cytotoxic effects of SM are unknown and were investigated in this study. The purpose of this study was to establish a rat model of SM-induced lung injury to observe the resulting changes in the lungs. Male rats (Sprague Dawley) were anesthetized, intratracheally intubated, and exposed to 2 mg/kg of SM by intratracheal instillation. Animals were euthanized 6, 24, 48, and 72 h post-exposure, and bronchoalveolar lavage fluid (BALF) and lung tissues were collected. Exposure of rats to SM resulted in rapid pulmonary toxicity, including partial bronchiolar epithelium cell shedding, focal ulceration, and an increased amount of inflammatory exudate and number of cells in the alveoli. There was also evidence that the protein content and cell count of BALF peaked at 48 h, and the alveolar septum was widened and filled with lymphocytes. SM exposure also resulted in partial loss of type I alveolar epithelial cell membranes, fuzzy mitochondrial cristae, detachment and dissociation of ribosomes attached to the surface of rough endoplasmic reticulum, cracked, missing, and disorganized microvilli of type II alveolar epithelial cells, and increased apoptotic cells in the alveolar septum. The propylene glycol control group, however, was the same as the normal group. These data demonstrate that the mechanism of a high concentration of SM (2 mg/kg) induced acute lung injury include histologic changes, inflammatory reactions, apoptosis, oxidative stress, and nuclear DNA damage; the degree of injury is time dependent.