In our previous study, we have confirmed that inphosgene-induced acute lung injury (ALI) rats, mesenchymal stem cells (MSCs) can treat thedisease. Moreover, heat shock protein 70 (Hsp70) can be used as a protective protein, and Hsp70 upregulated drastically when exposed to stressful conditions. We aimed to assess that MSCs overexpressed Hsp70 could enhance the capacity of MSCs and have a good therapeutic effect on phosgene-induced ALI. We transduced MSCs with Hsp70 and then we tested the function of the transduced MSCs. Sprague Dawley rats inhaled phosgene in a closed container for 5 minutes. The transduced MSCs and MSCs were administered via the trachea immediately. Rats in each group were killed at 6, 24, and 48 hours after exposure. Compared toMSCs, MSCs overexpressed Hsp70 enhanced MSCs viability, antiapoptotic ability, and migration ability, and these effects disappeared when using the phosphatidylinositol 3-kinase/protein kinase B (PI3K/AKT) pathway inhibitor. Furthermore, the results of pathological alterations improved. The lung wet-to-dry ratio declined. The lung injury index total protein content and total cells in bronchoalveolar lavage fluid (BALF) also declined. The level of tumor necrosis factor α declined and the level of interleukin-10 improved in BALF and serum. MSCs overexpressed Hsp70 can enhance the capacity and efficacy of MSCs in the treatment of phosgene-induced ALI and may be mediated through the PI3k/AKT signaling pathway. This article introduces a new approach to stem cell therapy for improving the efficacy of phosgene-induced ALI.