Thy-1 is a glycosylphosphytidylinositol-linked cell-surface glycoprotein present on a subset of lung fibroblasts, which plays an important role in postnatal alveolarization. In the present study, we define the role of Thy-1 in pulmonary lipofibroblast differentiation and in the regulation of lipid homeostasis via peroxisome proliferator-activated receptor-g (PPARg). Thy-1 was associated with interstitial cells containing lipid droplets in vivo. The transfection of Thy-1 into Thy-1 (2) fibroblasts increased triglyceride content, fatty-acid uptake, and the expression of the lipofibroblast marker adipocyte differentiationrelated protein. Thy-1 (1) fibroblasts exhibited 2.4-fold higher PPARg activity, and the inhibition or activation of PPARg reduced and increased triglyceride content, respectively. Thy-1 (2) fibroblasts were not responsive to either of the PPARg agonists ciglitazone or prostaglandin J 2 , supporting the importance of Thy-1 in signaling via PPARg. Thy-1 (1) fibroblasts expressed significantly higher concentrations of fatty-acid transporter protein-3 mRNA, and demonstrated higher rates of fatty-acid uptake and increased triglyceride content. The inhibition of fatty-acid transporter protein function reduced Thy-1 (1) fibroblast lipid content. The expression of Thy-1 in C57BL/6 lung fibroblasts increased during the neonatal period, coinciding with the onset of alveolarization. Thy-1 promoted lipofibroblast differentiation via the expression of PPARg, stimulated lipid accumulation via fatty-acid esterification, and enhanced the fatty-acid uptake mediated by fattyacid transporter proteins. Thy-1 is important in the regulation of lipofibroblast differentiation in the developing lung.Keywords: Thy-1; lipofibroblast; PPARg; lipid metabolismBeginning at 35 weeks after conception and continuing for up to 8 years after birth, the alveolar stage of lung development is marked by the sequential division of larger airspaces into smaller ones by secondary alveolar septa (1, 2). From term birth until adulthood, the 5-fold increase in the number of alveoli and the 20-fold increase in alveolar surface area are critical in meeting the increasing oxygenation and ventilation needs of human growth and activity (2, 3). Premature birth, exposure to high concentrations of inspired oxygen, and mechanical ventilation lead to impaired alveolar development and chronic lung disease (4). The impaired lung function of chronic lung disease results in significant morbidity, mortality, and healthcare costs from early life through adulthood (5-8). Understanding how the different tissues of the lung behave during normal and impaired alveolar development is a key first step toward restoring alveolarization and attenuating the burden of respiratory disease after premature birth.Pulmonary lipofibroblasts comprise an incompletely characterized population of lipid-containing interstitial cells that play an important role in alveolarization. Hyperoxia, hypoxia, and nicotine exposure stimulate lipofibroblasts to myofibroblast differentiation a...