Bombesin-like peptides (BLPs) are mitogens for bronchial epithelial cells and small cell lung carcinomas, and increase fetal lung growth and maturation in utero and in organ cultures. BLPs are hydrolyzed by the enzyme CD10/neutral endopeptidase 24.11 (CD10/NEP) which is expressed in bronchial epithelium and functions to inhibit BLP-mediated growth of small cell lung carcinomas. To determine whether CDI0/NEP regulates peptide-mediated lung development, we administered a specific CD1O/NEP inhibitor, SCH32615, to fetal mice in utero from gestational days e15-17. Fetal lung tissues were evaluated on el8 for: (a) growth using [3HIthymidine incorporation into nuclear DNA; and (b) maturation using: 13H1-choline incorporation into surfactant phospholipids, electron microscopy for type II pneumocytes, and Northern blot analyses for surfactant apoproteins A, B, and C. Inhibition of CD10 / NEP stimulated [3HIthymidine incorporation into DNA (70% above baseline, P < 0.005), 13Hlcholine incorporation into surfactant phospholipids (38% above baseline, P < 0.005), increased numbers of type II pneumocytes (36% above baseline, P = 0.07), and fivefold higher surfactant protein A transcripts (P < 0.05). CD10/NEP-mediated effects were completely blocked by the specific bombesin receptor antagonist, IDPhe'2, Leu14jbombesin. These observations suggest that CD10/NEP regulates fetal lung growth and maturation mediated by endogenous BLPs. (J. Clin. Invest. 1993. 91:1969-1973.) Key words: metalloendopeptidase * autocrine growth factors * fetal lung development * cell surface enzyme * common acute lymphoblastic leukemia antigen