Pulmonary surfactant is secreted by alveolar type II cells as lipid-rich, densely packed lamellar body-like particles (LBPs). The particulate nature of released LBPs might be the result of structural and/or thermodynamic forces. Thus mechanisms must exist that promote their transformation into functional units. To further define these mechanisms, we developed methods to follow LBPs from their release by cultured cells to insertion in an air-liquid interface. When released, LBPs underwent structural transformation, but did not disperse, and typically preserved a spherical appearance for days. Nevertheless, they were able to modify surface tension and exhibited high surface activity when measured with a capillary surfactometer. When LBPs inserted in an air-liquid interface were analyzed by fluorescence imaging microscopy, they showed remarkable structural transformations. These events were instantaneous but came to a halt when the interface was already occupied by previously transformed material or when surface tension was already low. These results suggest that the driving force for LBP transformation is determined by cohesive and tensile forces acting on these particles. They further suggest that transformation of LBPs is a self-regulated interfacial process that most likely does not require structural intermediates or enzymatic activation.