Efficient gas exchange in the lungs depends on regulation of the amount of fluid in the thin (average 0.2 m) liquid layer lining the alveolar epithelium. Fluid fluxes are regulated by ion transport across the alveolar epithelium, which is composed of alveolar type I (TI) and type II (TII) cells. The accepted paradigm has been that TII cells, which cover <5% of the internal surface area of the lung, transport Na ؉ and Cl ؊ and that TI cells, which cover >95% of the surface area, provide a route for water absorption. Here we present data that TI cells contain functional epithelial Na ؉ channels (ENaC), pimozide-sensitive cation channels, K ؉ channels, and the cystic fibrosis transmembrane regulator. TII cells contain ENaC and cystic fibrosis transmembrane regulator, but few pimozide-sensitive cation channels. These findings lead to a revised paradigm of ion and water transport in the lung in which (i) Na ؉ and Cl ؊ transport occurs across the entire alveolar epithelium (TI and TII cells) rather than only across TII cells; and (ii) by virtue of their very large surface area, TI cells are responsible for the bulk of transepithelial Na ؉ transport in the lung.S hortly before birth, the fetal lung converts from fluid secretion to fluid reabsorption. After birth, efficient gas exchange depends on regulation of the amount of fluid in the thin (average, 0.2 m) liquid layer lining the alveolar epithelium (1). Alveolar flooding resulting from cardiogenic pulmonary edema or acute lung injury impairs gas diffusion across the air͞blood barrier; an increase in alveolar fluid clearance restores a normal air͞blood barrier. Alveolar fluid transport from alveolar to interstitial spaces, driven by active Na ϩ transport across the alveolar epithelium (2), can be inhibited either by the addition of amiloride, a Na ϩ channel inhibitor, to the alveolar space, or ouabain, a Na ϩ ,K ϩ -ATPase inhibitor, to the vascular bed (3), suggesting that the alveolar epithelium is the major site of Na ϩ transport and fluid absorption in the adult lung.The alveolar epithelium, which covers Ͼ99% of the large internal surface area of the lung (4), is composed of two cell types, alveolar type I (TI) and type II (TII) cells. TII cells, which cover 2-5% of the internal surface area of the lung, are cuboidal cells that synthesize and secrete pulmonary surfactant. TII cells contain ion channels, including the amiloride-sensitive epithelial Na ϩ channel (ENaC) (5), Na ϩ ,K ϩ -ATPase (3) and the cystic fibrosis transmembrane regulator (CFTR) (6). TI cells are large squamous cells whose thin cytoplasmic extensions cover Ͼ95% of the internal surface area of the lung (7). TI cells express aquaporin 5, a water channel (8), and have the highest known osmotic water permeability of any mammalian cell type (9). The observations that TII cells contain ion channels and TI cells express aquaporins led to the paradigm that TII cells govern alveolar fluid balance by regulating Na ϩ transport in the lungs, whereas TI cells merely provide a route for passive water absorpti...