Mechanical ventilation is vital for supporting patients with pulmonary insufficiency. However, experimental data suggests that pulmonary injury can occur during mechanical ventilation as a result of elevated regional lung volumes resulting in excessive alveolar epithelial cell (AEC) stretch due to basement membrane deformation and reduced barrier function. AECs maintain integrity of the blood-gas barrier with gasket like intercellular tight junctions (TJ) which are anchored internally to the actin cytoskeleton. Our goal was to evaluate the effect of physiologically relevant, high magnitude biaxial stretch on the actin cytoskeleton, a principal regulator of monolayer barrier properties, as a foundation to develop strategies to reduce mechanical injury in stretched AECs. We used primary rat type I-like AEC monolayers cultured on flexible membranes and stretched biaxially to mimic the alveolus during high volume mechanical ventilation. We hypothesized that the actin cytoskeleton underwent rapid remodeling initiated through activation of the Rac1/Rho signaling pathways and resulted in increased monolayer permeability. We have demonstrated that AEC monolayers stretched biaxially undergo rapid magnitude and frequency-dependent actin cytoskeletal remodeling to form perjunctional actin rings (PJARs). PJAR formation during stretch was mediated by the Rac1/Akt pathway but not by the Rho kinase and myosin light chain pathway. Inhibition of several Rac1 pathway targets, including PI3K, Rac1, and PAK-1, resulted in the attenuation of stretch-induced PJAR formation and preservation of barrier properties in stretched monolayers. Rac1 pathway agonists platelet derived growth factor and calyculin-A were shown to induce actin cytoskeleton remodeling to form PJAR in unstretched monolayers. Furthermore, exogenous PIP3 increased Akt phosphorylation in unstretched monolayers and reduced cell death, but increased monolayer permeability in stretched monolayers. In summary, stretch of primary rat AEC monolayers increased Rac1 pathway activity, cytoskeleton remodeling, and monolayer permeability, all of which could be attenuated with Rac1 pathway inhibitors. With this data we can begin to develop novel treatment strategies aimed at preventing mechanical ventilator associated barrier dysfunction in vivo. We anticipate these treatments will reduce the incidence of pulmonary injury and mortality in patients that require mechanical ventilation.