Exposure to ambient particulate matter (PM), including PM from resuspension of soils and dusts, increases the risk for respiratory diseases. However, the exact mechanism of PM‐mediated damage to the lungs remains unclear. Due to recent increases in the frequency of dust storms in many areas, we examined the cytotoxic effects of soil‐dust samples collected in an arid zone in Israel on rat lung macrophages. The desert soil contains soil crusts and low levels of toxic metal content. Exposure of cells to water extracts from the dust samples caused significant reduction in the concentration of live cells and overall cell viability. The dust samples induced cell death through apoptosis, mitochondrial dysfunction, and increased mitochondrial lipid peroxidation. The dust samples generated more reactive oxygen species (ROS) compared to control‐treated samples and National Institute of Standards and Technology San Joaquin Valley standard reference material. To assess whether the oxidative imbalance induced by dust extract also interferes with the antioxidant defense, we evaluated phase II detoxifying and antioxidant enzymes, which are Nrf2 classical targets. The Nrf2 transcription factor is a master regulator of cellular adaptation to stress. The dust extracts produced a significant increase in phase II detoxifying genes. This work suggests that the health‐related injury observed in rat lung cells exposed to dust extracts is associated with ROS generation, mitochondrial dysfunction, mitochondrial lipid peroxidation, and cellular antioxidant imbalance. Damage to lung mitochondria may be an important mechanism by which dust‐containing bacterial material induces lung injury upon inhalation.