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Background Idiopathic pulmonary fibrosis involves irreversible alveolar destruction. Although alveolar epithelial type II cells are key functional participants within the lung parenchyma, how epithelial cells are affected upon bleomycin (BLM) exposure remains unknown. In this study, we determined whether BLM could induce cell cycle arrest via regulation of Schlafen (SLFN) family genes, a group of cell cycle regulators known to mediate growth-inhibitory responses and apoptosis in alveolar epithelial type II cells. Methods Mouse AE II cell line MLE-12 were exposed to 1–10 µg/mL BLM and 0.01–100 µM baicalein (Bai), a G1/G2 cell cycle inhibitor, for 24 hours. Cell viability and levels of pro-inflammatory cytokines were analyzed by MTT and enzyme-linked immunosorbent assay, respectively. Apoptosis-related gene expression was evaluated by quantitative real-time reverse transcription-polymerase chain reaction (qRT-PCR). Cellular morphology was determined after DAPI and Hoechst 33258 staining. To verify cell cycle arrest, propidium iodide (PI) staining was performed for MLE-12 after exposure to BLM. Results BLM decreased the proliferation of MLE-12 cells. However, it significantly increased expression levels of interleukin 6, tumor necrosis factor α, and transforming growth factor β1. Based on Hoechst 33258 staining, BLM induced condensation of nuclear and fragmentation. Based on DAPI and PI staining, BLM significantly increased the size of nuclei and induced G2/M phase cell cycle arrest. Results of qRT-PCR analysis revealed that BLM increased mRNA levels of BAX but decreased those of Bcl2. In addition, BLM/Bai increased mRNA levels of p53, p21, SLFN1, 2, 4 of Schlafen family. Conclusion BLM exposure affects pulmonary epithelial type II cells, resulting in decreased proliferation possibly through apoptotic and cell cycle arrest associated signaling.