The ability of the isolated perfused rat lung to produce lactate under aerobic and hypoxic conditions has been studied. The lung has been found capable of producing lactate at a rate of 53 mumol/g dry wt per h in the presence of as great as 1 mM extracellular lactate under aerobic conditions. Essentially 100% of the lactate synthesized was derived from [U-14C]glucose. When hypoxic, the rate of lactate production doubled, but only 60% was found to be derived from [U-14C]glucose. When the perfused lung was exposed to aerobic conditions following hypoxia, it was found that lactate production did not decrease. However, lactate production from [U-14C]glucose did increase. It is concluded that lung tissue possesses a high rate of lactate production under aerobic contitions from glucose in comparison to glucose oxidation to CO2. When the lung is hypoxic, lactate production increases as a probable result of amino acid catabolism with little anaerobic energy production occurring. The effect of hypoxia was not reversed within the duration of the performed experiments.