Abstract: Acute lung injury (ALI) is a significant complication of sepsis, characterized by high morbidity, mortality, and poor prognosis. Neutrophils, as critical intrinsic immune cells in the lung, play a fundamental role in the development and progression of ALI. During ALI, neutrophils generate neutrophil extracellular traps (NETs), and excessive NETs can intensify inflammatory injury. Research indicates that Taohe Chengqi decoction (THCQD) can ameliorate sepsis-induced lung inflammation and modulate immune function. This study aimed to investigate the mechanisms by which THCQD improves ALI and its relationship with NETs in sepsis patients, seeking to provide novel perspectives and interventions for clinical treatment. The findings demonstrate that THCQD enhanced survival rates and reduced lung injury in the cecum ligation and puncture (CLP)-induced ALI mouse model. Furthermore, THCQD diminished neutrophil and macrophage infiltration, inflammatory responses, and the production of pro-inflammatory cytokines, including interleukin-1β (IL-1β), IL-6, and tumor necrosis factor α (TNF-α). Notably, subsequent experiments confirmed that THCQD inhibits NET formation both in vivo and in vitro. Moreover, THCQD significantly decreased the expression of peptidyl arginine deiminase 4 (PAD4) protein, and molecular docking predicted that certain active compounds in THCQD could bind tightly to PAD4. PAD4 overexpression partially reversed THCQD’s inhibitory effects on PAD4. These findings strongly indicate that THCQD mitigates CLP-induced ALI by inhibiting PAD4-mediated NETs.