Rationale: There are controversial reports on applications of mesenchymal stromal cells (MSCs) in patients with acute respiratory distress syndrome (ARDS). Objectives: We hypothesized that lung microenvironment was the main determinant of beneficial versus detrimental effects of MSCs during ARDS. Methods: Lung proteome was profiled in three models of injury induced by acid instillation and/or mechanical ventilation in mice. Human gene of glutathione peroxidase-1 was delivered before MSC administration; or MSCs carrying human gene of IL-10 or hepatocyte growth factor were administered after lung injury. An inhibitory cocktail against IL-6, fibronectin, and oxidative stress was used in in vitro studies using human small airway epithelial cells and human MSCs after exposure to plasma of patients with ARDS. Measurements and Main Results: Distinct proteomic profiles were observed in three lung injury models. Administration of MSCs protected lung from ventilator-induced injury, whereas it worsened acid-primed lung injuries associated with fibrotic development in lung environment that had high levels of IL-6 and fibronectin along with low antioxidant capacity. Correction of microenvironment with glutathione peroxidase-1, or treatment with MSCs carrying human gene of IL-10 or hepatocyte growth factor after acid-primed injury, reversed the detrimental effects of native MSCs. Proteomic profiles obtained in the mouse models were also similarly observed in human ARDS. Treatment with the inhibitory cocktail in samples of patients with ARDS retained protective effects of MSCs in small airway epithelial cells. Conclusions: MSCs can be beneficial or detrimental depending on microenvironment at the time of administration. Identification of potential beneficiaries seems to be crucial to guide MSC therapy in ARDS.