Pulmonary fibrosis (PF) is a chronic pulmonary disease characterized by excessive extracellular matrix (ECM) deposition, with cigarette smoking being a major risk factor and no effective treatment at present. Transforming growth factor beta 1 (TGF-β1) plays a key role in PF and regulating oxidative stress. This study investigated the effects and mechanisms of Artemisia rupestris L. ethanol extract (ER) on cigarette smoke (CS)-induced PF. We used pull-down and LC-MS analyses to screen and identify compounds that bind to TGF-β1 in ER. We demonstrated that ER inhibits CS-induced PF, lung inflammation, and oxidative stress, thereby improving pulmonary structural injury. The ER inhibits fibroblast activation and fibroblast-to-myofibroblast transition (FMT), reducing collagen deposition for the treatment of PF. We identified the active ingredient in ER that binds to TGF-β1, namely, Luteolin 7-glucuronide (LG). LG inhibits the TGF-β1 signaling pathway through targeted binding to TGF-β1, downregulates the expression of downstream proteins (including collagen I, α-SMA, MMP-2, and MMP-9), and inhibits fibronectin expression. It also inhibits fibroblast activation and FMT, enhances E-cadherin expression to promote fibroblast adhesion, and suppresses collagen deposition, alleviating PF. Based on these findings, we propose that LG might be a promising therapeutic drug candidate for treating PF.