Mechanical ventilation can overdistend the lungs or generate shear forces in them during repetitive opening/closing, contributing to lung injury and inflammation in patients with acute respiratory distress syndrome (ARDS). Repair of the injured lung epithelium is important for restoring normal barrier and lung function. In the current study, we investigated the effects of cyclic mechanical strain (CS), constant distention strain (CD), and simulated positive end expiratory pressure (PEEP) on activation of Rac1 and wound closure of rat primary alveolar type 2 (AT2) cells. Cyclic stretch inhibited the migration of wounded AT2 cells in a dose dependent manner with no inhibition occurring with 5% CS, but significant inhibition with 10% and 15% CS. PEEP conditions were investigated by stretching AT2 cells to 15% maximum strain (at a frequency of 10 cycles/min) with relaxation to 10% strain. AT2 cells were also exposed to 20% CD. All three types of mechanical strain inhibited wound closure of AT2 cells as compared to static controls. Since lamellipodial extensions in migrating cells at the wound edge were significantly smaller in stretched cells, we measured Rac1 activity and found it to be decreased in stretched cells. We also demonstrate that Tiam1, a Rac1-specific guanine nucleotide exchange factor (GEF), was expressed mainly in the cytosol of AT2 cells exposed to mechanical strain as compared to membrane localization in static cells. Downregulation of Tiam1 with 100 µM NSC-23766 inhibited activation of Rac1 and migration of AT2 cells, suggesting its involvement in repair mechanisms of AT2 cells subjected to mechanical strain.