Background: Lung inflammation occurs in many lung diseases, but has limited effective therapeutics. Ginseng andits derivatives have anti-inflammatory effects, but their unstable physicochemical and metabolic propertieshinder their application in the treatment. Panaxadiol (PD) is a stable saponin among ginsenosides. Inhalationadministration may solve these issues, and the specific mechanism of action needs to be studied. Methods: A mouse model of lung inflammation induced by lipopolysaccharide (LPS), an in vitro macrophageinflammation model, and a coculture model of epithelial cells and macrophages were used to study the effectsand mechanisms of inhalation delivery of PD. Pathology and molecular assessments were used to evaluate efficacy. Transcriptome sequencing was used to screen the mechanism and target. Finally, the efficacy andmechanism were verified in a human BALF cell model. Results: Inhaled PD reduced LPS-induced lung inflammation in mice in a dose-dependent manner, includinginflammatory cell infiltration, lung tissue pathology, and inflammatory factor expression. Meanwhile, the dose ofinhalation was much lower than that of intragastric administration under the same therapeutic effect, which maybe related to its higher bioavailability and superior pharmacokinetic parameters. Using transcriptome analysisand verification by a coculture model of macrophage and epithelial cells, we found that PD may act by inhibitingTNFA/TNFAR and IL7/IL7R signaling to reduce macrophage inflammatory factor-induced epithelial apoptosisand promote proliferation. Conclusion: PD inhalation alleviates lung inflammation and pathology by inhibiting TNFA/TNFAR and IL7/IL7Rsignaling between macrophages and epithelial cells. PD may be a novel drug for the clinical treatment of lunginflammation.