Objective To explore the effect of postoperative needle-embedding combined with intercostal nerve block under dexmedetomidine anesthetic induction on postoperative pain stress and early recovery quality in patients with lung cancer after video-assisted thoracoscopic radical surgery. Methods A total of 120 patients with lung cancer undergoing video-assisted thoracoscopic radical surgery were selected and divided into a control group and an observation group by using the random number table method, with 60 cases in each group. The control group was given intercostal nerve block under dexmedetomidine anesthetic induction, while the observation group received postoperative needle-embedding on the basis of the intervention in the control group. The two groups of patients were compared in terms of the Visual Analogue Scale (VAS) pain scores, stress indicators (serum cortisol, epinephrine, and interleukin-6 levels), and postoperative recovery quality (time to first ambulation, length of hospital stay, and time to chest tube removal after surgery) at different time points. Results In both groups, the postoperative VAS pain scores showed a time-dependent trend (P<0.05). At 24 hours postoperatively, the VAS scores in both groups were lower than those at 12 hours postoperatively, with the observation group having lower scores than the control group; at 48 hours postoperatively, the VAS scores in both groups were lower compared with those at 12 hours and 24 hours postoperatively, and the scores in the observation group were still lower than those in the control group (P<0.05). Additionally, the levels of serum cortisol, epinephrine, and interleukin-6 at 24 hours postoperatively, as well as the time to first ambulation, length of hospital stay, and time to chest tube removal after surgery, were all lower/shorter in the observation group than in the control group (P<0.05). Conclusion Postoperative needle-embedding combined with intercostal nerve block under dexmedetomidine anesthetic induction can effectively alleviate pain, inhibit stress response, and accelerate the rehabilitation process in patients with lung cancer after video-assisted thoracoscopic radical surgery.