Inclusion Criteria:

• Patients diagnosed with IPF based on accepted criteria (see above) within 12 months prior to screening.
• Age 40-75.
• Absence of significant pulmonary hypertension as measured by right heart catheterization (mPAP ≥ 30 mmHG) or echocardiography (RVSP ≥ 50 mmHg).
• FVC ≥ 55% of predicted baseline value at screening; DLCO ≥ 30% predicted.
• PaO2 ≥ 65 mm Hg at rest on room air
• Patient able to understand and willing to sign a written informed consent and willing to comply with all requirements of the study protocol including lung deposition studies.
• Patient fits criteria for research bronchoscopy and is willing to undergo procedure.

Exclusion Criteria:

• Six minute walk distance of < 200 meters.
• Patient unwilling or unable to undergo research bronchoscopy.
• Patient with known life threatening asthma or severe COPD.
• Patient requiring oxygen therapy for maintenance of adequate arterial oxygenation at rest.
• Patient with hypersensitivity to study medication or other component medication.
• Patient with known severe cardiac disease, severe peripheral vascular disease or seizure disorder which may be exacerbated by study drug administration (contraindications to drug administration as per package insert).
• Pregnant or lactating; Females of child-bearing potential will be required to have negative pregnancy test and be required to use accepted form of birth control (abstinence for study duration is the preferred method).
• Evidence of active infection within one week prior to treatment.
• Any condition, other than IPF, which is likely to result in the death of the patient within one year from study enrollment.
• Abnormal serum laboratory values including:
• Liver function above specified limits: total bilirubin > 1.5 X upper limits of normal, alanine amino transferase > 3X upper limit of normal, alkaline phosphatase > 3X upper limit of normal, albumin < 3.0 at screening.
• CBC outside specified limits: WBC < 2,500/mm3, hematocrit < 30 or > 59, platelets < 100,000/mm3.
• Creatinine > 1.5X upper limits normal at screening.
• Drugs for therapy for pulmonary fibrosis, including corticosteroids, azathioprine and/or cyclophosphamide, or n-acetylcysteine within the previous six weeks.
• Prior therapy with any class of interferon medication.
• Investigational therapy for any indication within the last 28 days.
• In a pulmonary rehabilitation program or planning to attend a pulmonary rehabilitation program.