SET-M33 is a synthetic peptide that is being developed as a new antibiotic against major Gram-negative bacteria. Here we report two in vivo studies to assess the toxicity and efficacy of the peptide in a murine model of pulmonary inflammation. First, we present the toxicity study in which SET-M33 was administered to CD-1 mice by snout inhalation exposure for 1 h/day for 7 days at doses of 5 and 20 mg/kg/day. The results showed adverse clinical signs and effects on body weight at the higher dose, as well as some treatment-related histopathology findings (lungs and bronchi, nose/turbinates, larynx and tracheal bifurcation). On this basis, the no observable adverse effect level (NOAEL) was considered to be 5 mg/kg/day. We then report an efficacy study of the peptide in an endotoxin (LPS)-induced pulmonary inflammation model. Intratracheal administration of SET-M33 at 0.5, 2 and 5 mg/kg significantly inhibited BAL neutrophil cell counts after an LPS challenge. A significant reduction in pro-inflammatory cytokines, KC, MIP-1α, IP-10, MCP-1 and TNF-α was also recorded after SET-M33 administration.