Secretion of surfactant proteins A and D (SP-A and SP-D) has been difficult to study in vitro because a culture system for maintaining surfactant secretion has been difficult to establish. We evaluated several growth factors, corticosteroids, rat serum, and a fibroblast feeder layer for the ability to produce and maintain a polarized epithelium of type II cells that secretes SP-A and SP-D into the apical medium. Type II cells were plated on a filter insert coated with an extracellular matrix and were cultured at an air-liquid interface. Keratinocyte growth factor (KGF) stimulated type II cell proliferation and secretion of SP-A and SP-D more than fibroblast growth factor-10 (FGF-10), hepatocyte growth factor (HGF), or heparin-binding epidermal-like growth factor (HB-EGF). Cells cultured in the presence of KGF and rat serum with or without fibroblasts had high surfactant protein mRNA levels and exhibited a high level of SP-A and SP-D secretion. Dexamethasone inhibited type II cell proliferation but increased expression of SP-B. In the presence of KGF, rat serum, and dexamethasone, the mRNAs for the surfactant proteins were maintained at high levels. Secretion of SP-A and SP-D was found to be independent of phospholipid secretion.