The occurrence of acute lung injury (ALI) caused by lipopolysaccharide (LPS) is prevalent and perilous among older individuals. Inflammation and oxidative stress are vital factors in the progression of ALI in this population. Dayuan Yin (DYY) is a classic Chinese herbal formula used for treating pulmonary diseases. Therefore,this situation can be well simulated by selecting suitable aged rats and induced by LPS, which is helpful to evaluate the role of DYY. The objective of this study is to assess the therapeutic efficacy of DYY in reducing pulmonary inflammation and oxidative stress injury in aged rats induced by LPS. In elderly male Sprague Dawley (SD) rats, the ALI model was induced by injecting LPS into the peritoneal cavity. The therapeutic effect of the DYY group was evaluated after 3 days of oral administration. Lung tissue damage was assessed using hematoxylin-eosin staining and the lung wet/dry (W/D) ratio. Inflammatory reaction in lung tissue was analyzed by counting inflammatory agents, measuring total protein (TP), and examining the concentration of inflammatory components in bronchoalveolar lavage fluid (BALF). Lung oxidative stress was assessed by measuring malondialdehyde (MDA), inducible nitric oxide synthase (iNOS), and superoxide dismutase (SOD) levels in BALF. The impact of DYY on the phosphorylation of PI3K, AKT, and NF-κBp65 protein was analyzed using Western Blot (WB). The administration of DYY exhibited a dose-dependent reduction in the severity of lung injury caused by LPS, leading to a reversal of the LPS-induced lung W/D ratio. Furthermore, DYY treatment resulted in decreased levels of leukocytes, eosinophils, neutrophils, macrophages, lymphocytes, and total protein in BALF. Additionally, DYY significantly inhibited the upregulation of Interleukin -6, Interleukin -10, and Interleukin -1β (IL-6, IL-10, IL-1β) as well as Tumor necrosis factor-α(TNF-α) induced by LPS (P<0.01). The lungs experienced oxidative stress due to LPS, leading to the production of MDA and iNOS, as well as a decrease in SOD activity. DYY reduced oxidative stress in the lungs and inhibited the activation of p-PI3K, p-Akt, and p-NF-κBp65, with a greater effect at higher doses. In a dose-dependent manner, DYY suppresses the inflammatory response and oxidative stress in the lung tissue of elderly rats, thereby reducing ALI caused by LPS. This effect may be attributed to the inhibition of the PI3K/AKT/NF-κB pathway activation.