RATIONALE: Alveolar liquid clearance is regulated by Na(+) uptake through the apically expressed epithelial sodium channel (ENaC) and basolaterally localized Na(+)-K(+)-ATPase in type II alveolar epithelial cells. Dysfunction of these Na(+) transporters during pulmonary inflammation can contribute to pulmonary edema. OBJECTIVES: In this study, we sought to determine the precise mechanism by which the TIP peptide, mimicking the lectin-like domain of tumor necrosis factor (TNF), stimulates Na(+) uptake in a homologous cell system in the presence or absence of the bacterial toxin pneumolysin (PLY). METHODS: We used a combined biochemical, electrophysiological, and molecular biological in vitro approach and assessed the physiological relevance of the lectin-like domain of TNF in alveolar liquid clearance in vivo by generating triple-mutant TNF knock-in mice that express a mutant TNF with deficient Na(+) uptake stimulatory activity. MEASUREMENTS AND MAIN RESULTS: TIP peptide directly activates ENaC, but not the Na(+)-K(+)-ATPase, upon binding to the carboxy-terminal domain of the α subunit of the channel. In the presence of PLY, a mediator of pneumococcal-induced pulmonary edema, this binding stabilizes the ENaC-PIP2-MARCKS complex, which is necessary for the open probability conformation of the channel and preserves ENaC-α protein expression, by means of blunting the protein kinase C-α pathway. Triple-mutant TNF knock-in mice are more prone than wild-type mice to develop edema with low-dose intratracheal PLY, correlating with reduced pulmonary ENaC-α subunit expression. CONCLUSIONS: These results demonstrate a novel TNF-mediated mechanism of direct ENaC activation and indicate a physiological role for the lectin-like domain of TNF in the resolution of alveolar edema during inflammation.