Acute respiratory distress syndrome (ARDS) is an inflammatory lung disease with a high morbidity and mortality rate, for which no pharmacologic treatment is currently available. Our previous studies discovered that a pivotal step in the disease process is the activation of the nuclear factor of activated T cells (NFAT) c3 in lung macrophages, suggesting that inhibitors against the upstream protein phosphatase calcineurin should be effective for prevention/treatment of ARDS. Herein, we report the development of a highly potent, cell-permeable, and metabolically stable peptidyl inhibitor, CNI103, which selectively blocks the interaction between calcineurin and NFATc3, through computational and medicinal chemistry. CNI103 specifically inhibited calcineurin signaling in vitro and in vivo and exhibited a favorable pharmacokinetic profile, broad tissue distribution following different routes of administration, and minimal toxicity. Our data indicate that CNI103 is a promising novel treatment for ARDS and other inflammatory diseases.