Several studies have shown that gram-negative bacilli infection can cause acute lung injury, and that consequent pulmonary fibrosis is caused when alveolar type-II epithelial cells undergo epithelial-mesenchymal transition (EMT). However, the mechanism underlying this change remains unclear. This study aimed to elucidate whether the main toxin of gram-negative bacteria, lipopolysaccharide (LPS), can induce EMT in human alveolar epithelial cells, and the underlying molecular mechanisms. Human alveolar type-II epithelial cells (A549) were used in EMT induction experiments. Cells were collected after LPS exposure, and changes in the expression levels of epithelial and mesenchymal cell markers were determined. Further, the effect of LPS exposure on the expression of Toll-like Receptor 4 (TLR4), Transforming Growth Factor-beta 1 (TGF-β1) and Smad2/3 was assessed. The expression level of a mesenchymal cell marker was also assessed after pharmacological inhibition of TLR4 and TGF-β1 prior to addition of LPS, to identify downstream pathways involved in EMT induction. Results showed that LPS exposure caused significant downregulation of epithelial marker E-cadherin, and upregulation of mesenchymal marker vimentin, together with increased expression of TGF-β1 and activation of the TGF-β1/Smad2/3 pathway. Furthermore, pretreatment with TGF-β1 and TLR4 inhibitors suppressed EMT, and treatment with the latter also reduced the expression level of TGF-β1. Overall, we conclude that LPS directly induces EMT in A549 cells through upregulation of TLR4 and activation of the TGF-β1/Smad2/3 signalling pathway. Our results suggest that LPS-mediated pulmonary fibrosis may occur in ALI patients even if the LPS-induced inflammatory response is inhibited.