Idiopathic pulmonary fibrosis (IPF) is a chronic and progressive interstitial lung disease; its cause is unknown, and it leads to notable health problems. Currently, only two drugs are recommended for IPF treatment. Although these drugs can mitigate lung function decline, neither can improve nor stabilize IPF or the symptoms perceived by patients. Therefore, the development of novel treatment options for pulmonary fibrosis is required. The present study investigated the effects of a novel compound, caffeic acid ethanolamide (CAEA), on human pulmonary fibroblasts and evaluated its potential to mitigate bleomycin-induced pulmonary fibrosis in mice. CAEA inhibited TGF-β-induced α-SMA and collagen expression in human pulmonary fibroblasts, indicating that CAEA prevents fibroblasts from differentiating into myofibroblasts following TGF-β exposure. In animal studies, CAEA treatment efficiently suppressed immune cell infiltration and the elevation of TNF-α and IL-6 in bronchoalveolar lavage fluid in mice with bleomycin-induced pulmonary fibrosis. Additionally, CAEA exerted antioxidant effects by recovering the enzymatic activities of oxidant scavengers. CAEA directly inhibited activation of TGF-β receptors and protected against bleomycin-induced pulmonary fibrosis through inhibition of the TGF-β/SMAD/CTGF signaling pathway. The protective effect of CAEA was comparable to that of pirfenidone, a clinically available drug. Our findings support the potential of CAEA as a viable method for preventing the progression of pulmonary fibrosis.