Introduction: Pneumonia continues to be a significant infectious disease, marked by ongoing lung inflammation, breathing difficulties, and high mortality rates, especially among young children in low-income nations. Methods: This study explored the therapeutic potential of peptide hydrolysates from Results: PPH treatment alleviated LTA-induced symptoms, reduced inflammation in the lungs and colon, and improved the balance of gut microbiota. It strengthens the intestinal barrier by increasing the levels of Mucin-2, Mucin-4, and tight junction proteins (Claudin-1, Occludin, ZO-1). Immune modulation was observed, with a decrease in pro-inflammatory cytokine levels, an increase in anti-inflammatory cytokine levels, and suppression of NF-κB signaling. Restoration of the gut microbiota composition further supports the therapeutic role of PPH. Discussion/conclusion: These results indicate that PPH mitigates LTA-induced pneumonia by reinforcing the intestinal barrier, modulating inflammatory pathways, including suppression of NF-κB, and restoring microbial balance. PPH represents a promising new approach for managing pneumonia as a chronic inflammatory disease.