ABSTRACT. Wecultured isolated alveolar type II epithelial cells on a collagen gel matrix. At confluence, cultured type II cells were exposed to air. Under these conditions, the cellular density of the type II cells increased and they nodularly aggregated. The cultured cells consisted mainly of flattened epithelia intermingled with cuboidal cells. In the cytoplasm and at the apical surface of cuboidal cells, a surfactant protein was detected by inimunohistochemistry and electron microscopy. Electron microscopic examination revealed that the surfactants in the cytoplasm increased when the cells were exposed to air. On the other hand, the flattened cells morphologically resembled type I cells in vivo. Air exposure treatment on the collagen gel matrix promoted the maintenance of the characteristic differentiation of alveolar epithelial cells. This culture system seemedto provide an appropriate physiological environment in which to study differentiation and disorders of pulmonary alveoli.The pulmonaryalveolar epithelium consists of two cell types. The bulk of the alveolar surface is covered by type I cells, which are characterized by their flattened profile and lack of distinctive organella and they appear to be terminally differentiated and do not proliferate either during growth or in response to lung injury. They do not proliferate in the culture system. On the other hand, type II cells are cuboidal and serve as the stem cell for the alveolar epithelium, with potential to proliferate and to assume type I phenotype (3, 16, 18,25).For this reason, investigators have used isolated type II cells to study alveolar cell biology, biochemistry, and molecular biology (2,4,12,13,21,24,25 (2,12,13). Briefly, 21-to 28-day-old male Wistar rats were anesthetized with diethyl ether, and the pulmonary circulation was per fused with a balanced salt solution, and the trachea was cannulated. To remove macrophages, the lung was lavaged through the trachea with a 1,000 protease units/ml bacterial neutral protease (Dispase I, Goudou-Shusei Co., Ltd., Tokyo, Japan) several times. Dispase I was instilled into the lung for 20 minutes at 37°C. Subsequently the lungs were removed from the tracheobronchial tree and minced with scissors in the presence of Eagle's Minimal Essential Medium (MEM,Nissui Pharmaceu-