We reported the case of pulmonary alveolar hemorrhage caused by propylthiouracil (PTU) with severe respiratory failure and anemia, who improved with PTU discontinuance and steroid therapy. A 35-year-old woman presented with pyrexia, shortness of breath, and arthralgia. Her chest radiograph and CT showed diffuse ground-glass opacities, and her arterial blood gas analysis revealed severe respiratory failure. Laboratory results included a hemoglobin level of 5.2 g/dl, and a myeloperoxidase-antineutrophil cytoplasmic antibody (MPO-ANCA) level of 203 EU (normal range <9.0 EU). As bronchoalveolar lavage (BAL) fluid showed fresh blood-like fluid containing hemosiderin-laden macrophages, pulmonary alveolar hemorrhage was diagnosed. Since she had been taking PTU for 4 years, PTU was immediately discontinued. Steroid pulse therapy was performed, followed by oral prednisolone 30 mg per day, and her symptoms and chest radiograph findings rapidly improved. Based on the time-course changes, MPO-ANCA may have been involved in the development of pulmonary alveolar hemorrhage.