Nanotechnology is an important and emerging industry with a projected annual market of around one trillion US dollars by 2011-2015. Concerns about the toxicity of nanomaterials in humans, however, have recently been raised. Although studies of nanoparticle toxicity have focused on lung disease the molecular link between nanoparticle exposure and lung injury remained unclear. In this report, we show that cationic Starburst polyamidoamine dendrimer (PAMAM), a class of nanomaterials that are being widely developed for clinical applications can induce acute lung injury in vivo. PAMAM triggers autophagic cell death by deregulating the Akt-TSC2-mTOR signaling pathway. The autophagy inhibitor 3-methyladenine rescued PAMAM dendrimer-induced cell death and ameliorated acute lung injury caused by PAMAM in mice. Our data provide a molecular explanation for nanoparticle-induced lung injury, and suggest potential remedies to address the growing concerns of nanotechnology safety.