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Qingke Pingchuan granules (QKPCG), a patented traditional Chinese medicine, clinically, are recommended for acute tracheobronchitis, cough, community‐acquired pneumonia, and other respiratory diseases. However, its potential protective effect and mechanism of action in acute lung injury (ALI) have not been explored. We aimed to explore the mechanisms underlying the protective role of QKPCG in ALI. The therapeutic efficacy of QKPCG was investigated in a lipopolysaccharide (LPS)‐induced ALI mouse model. Mice were divided into three groups, namely, the Control, LPS, and LPS + QKPCG groups. Mice in the LPS + QKPCG group were administered QKPCG intragastrically as a treatment once a day for a total of three days. QKPCG effectively increased survival and reduced lung injury in treated mice. It significantly reduced the LPS‐induced expression of interleukin (IL)‐6, tumor necrosis factor‐α (TNF‐α), IL‐1α, and IL‐1β. RNA‐sequencing followed by real‐time quantitative polymerase chain reaction validation suggested a critical role of the secretoglobin family 1A member 1 (Scgb1a1) gene in mediating the protective effect of QKPCG. Further, QKPCG reversed the LPS‐induced downregulation of the Clara cell 10 kDa protein (CC10), a pulmonary surfactant protein encoded by Scgb1a1, which is mainly secreted by club cells in the lungs. Exogenous supplementation of CC10 alleviated LPS‐induced ALI. Hematoxylin and eosin staining and enzyme‐linked immunosorbent assay results further confirmed the anti‐inflammatory properties of CC10, which were suggested as mediated via the inhibition of NFκB phosphorylation. In summary, our study provides evidence of the beneficial role of QKPCG in alleviating lung injury, mediated via the decreased disruption of club cells and higher expression of CC10, which leads to NFκB pathway inhibition. [ABSTRACT FROM AUTHOR]