Mushroom Phellinus linteus ("Sanghuang" in Chinese) is a popular medicinal polypore used to treat several disorders through its various biological functions. Inonotus sanghuang is claimed to produce general immune-potentiating and strengthening, anti-inflammatory, anti-tumor and anti-microbial properties, but its effect on acute lung inflammation and oxidative stress are not clearly understood. To determine the effect and mechanism of the polyphenols-rich ethyl acetate fraction from wild I. sanghuang extract (ISE) on acute lung injury (ALI) induced by bleomycin (BLM), female C57BL/6 mice were fed ISE (0%, 0.15% or 0.6% in diet) for 4 weeks prior to challenge with BLM. Bronchoalveolar lavage fluid (BALF) from lung, spleen and lung tissues were collected on day 3 after BLM challenge for histological, oxidative stress, molecular and biochemical analysis. ISE supplementation improved pathological features in lung injury scores and reduced lung wet-to-dry ratios. Moreover, ISE reduced inflammatory cell infiltration and the pro-inflammatory cytokines including IL-1β, IL-6 and TNF-α in BALF, decreased the MPO activity and the MDA level and increased the SOD, CAT and GSH-Px activities in lung tissue homogenates. Further mechanism analysis demonstrated that dietary ISE inhibited NF-κB signal. Finally, peripheral immune function analysis showed that ISE had less effect on immune response including splenocyte producing inflammatory cytokines and T cell proliferation except for IL-1β and IL-2. Our findings indicate the possibility that dietary ISE attenuates ALI induced by BLM through correcting the inflammation and oxidation balance at least in part via inhibiting NF-κB signal in vivo, suggesting that ISE might be a valuable medicinal food effective in improving lung injury.