Annexin II has been implicated in membrane fusion during the exocytosis of lamellar bodies from alveolar epithelial type II cells. Most previous studies were based on the fusion assays by using model membranes. In the present study, we investigated annexin II-mediated membrane fusion by using isolated lamellar bodies and plasma membrane as determined by the relief of octadecyl rhodamine B (R18) self-quenching. Immunodepletion of annexin II from type II cell cytosol reduced its fusion activity. Purified annexin II tetramer (AIIt) induced the fusion of lamellar bodies with the plasma membrane in a dose-dependent manner. This fusion is Ca 2؉ -dependent and is highly specific to AIIt because other annexins (I and II monomer, III, IV, V, and VI) were unable to induce the fusion. Modification of the different functional residues of AIIt by N-ethylmaleimide, nitric oxide, or peroxynitrite abolished AIIt-mediated fusion. Arachidonic acid enhanced AIIt-mediated fusion and reduced its Ca 2؉ requirement to an intracellularly achievable level. This effect is due to membranebound arachidonic acid, not free arachidonic acid. Other fatty acids including linolenic acid, palmitoleic acid, myristoleic acid, stearic acid, palmitic acid, and myristic acid had little effect. AIIt-mediated fusion was suppressed by the removal of arachidonic acid from lamellar body and plasma membrane using bovine serum albumin. The addition of arachidonic acid back to the arachidonic acid-depleted membranes restored its fusion activity. Our results suggest that the fusion between lamellar bodies with the plasma membrane is driven by the synergistic action of AIIt and arachidonic acid.Lung surfactant is a surface active material synthesized and secreted by cuboidal alveolar type II cells (1-3). It is composed of phospholipids, mainly dipalmitoylphosphatidylcholine, and surfactant proteins A-D. It minimizes the surface tension at the air-liquid interface by inserting phospholipids between water molecules. As a result, surfactant disrupts the cohesive hydrogen bonds and prevents them from exerting high molecular forces at the alveolar surface. Deficiency of dipalmitoylphosphatidylcholine in the alveolar surface has been associated with infant respiratory distress syndrome.The secretion of surfactant by type II cells involves the translocation, docking, and fusion of lamellar bodies to the plasma membrane. For the lamellar body content to reach its extracellular destination, a continuity of the vesicular lumen and extracellular fluid must be established. This continuity is maintained through the formation of a narrow pore similar to membrane channels (4 -6). The formation of this pore is a complex event involving physical and chemical factors and is regulated by intracellular Ca 2ϩ and proteins (7). Studies on mast cells and chromaffin cells revealed that the opening of fusion pore and extrusion of granule content is influenced by an osmotic force depending upon the osmolarity of the surrounding solution (8).Annexin II plays multidimensional roles in dif...