The epithelium of the respiratory bronchiole in the adult rhesus monkey consists of two populations: a pseudostratified epithelium with basal, mucous goblet, and ciliated cells located near the pulmonary artery (PA); and a simple cuboidal epithelium composed only of nonciliated bronchiolar epithelial (or Clara) cells in areas away from the PA. This study describes the pattern of differentiation of these two epithelial populations, and their relationship to the PA and to the time of appearance of alveoli in the respiratory bronchiole of the rhesus monkey during the period of 90-125 days gestational age (DGA). These events were related to changes in the adjacent parenchyma. Dissected airways of infusion-fixed, critical-point-dried lungs were evaluated by scanning microscopy followed by light microscopy of the same airways. At 54% of gestation (90 DGA), the distal airway was lined by a mixture of ciliated and nonciliated cells. By 67% of gestation (110 DGA), the ciliated cells were confined to the epithelium over the PA. The underlying connective tissue initially was cellular containing few fibers but was fibrous by 76% of gestation (125 DGA). Alveolarization began near the most distal cartilage at 57% of gestation (95 DGA), the same period at which secondary septation occurred in the distal acinus. Thus, alveolarization occurred simultaneously in two centers: 1) the proximal centriacinar region in the vicinity of the most distal cartilage and 2) the distal lung parenchyma. The duration of centriacinar alveolarization was short, approximately 5 days.