The AU-rich element (ARE)-binding factor 1 (AUF1) acts as a switch for septic shock, although its underlying mechanisms remain largely unknown. In this study, we examined the biological significance and potential molecular mechanism of AUF1 in regulating ferroptosis in sepsis-induced acute lung injury (ALI). Alveolar epithelial cells (AECs) challenged with ferroptosis-inducing compounds and cecum ligation and puncture (CLP)-induced ALI were used as the in vitro and in vivo model, respectively. The stability of AUF1 and its degradation by ubiquitin–proteasome pathway were examined by cycloheximide chase analysis and co-immunoprecipitation assay. The regulation of AUF1 on nuclear factor E2-related factor 2 (NRF2) and activation transcription factor 3 (ATF3) was explored by RNA immunoprecipitation (RIP), RNA pull-down, and mRNA stability assays. Functionally, the effects of altering AUF1, NRF2 or ATF3 on ferroptosis in AECs or ALI mice were evaluated by measuring cell viability, lipid peroxidation, iron accumulation, and total glutathione level. AUF1 was down-regulated in AECs challenged with ferroptosis-inducing compounds, both on mRNA and protein levels. The E3 ubiquitin ligase FBXW7 was responsible for protein degradation of AUF1 during ferroptosis. By up-regulating NRF2 and down-regulating ATF3, AUF1 antagonized ferroptosis in AECs in vitro. In the CLP-induced ALI model, the survival rate of AUF1 knockout mice was significantly reduced and the lung injuries were aggravated, which were related to the enhancement of lung ferroptosis. FBXW7 mediates the ubiquitination and degradation of AUF1 in ferroptosis. AUF1 antagonizes ferroptosis by regulating NRF2 and ATF3 oppositely. Activating AUF1 pathway may be beneficial to the treatment of sepsis-induced ALI.