Mature alveolar type II cells that produce pulmonary surfactant are essential for adaptation to extrauterine life. We profiled gene expression in human fetal lung epithelial cells cultured in serumfree medium containing dexamethasone and cyclic AMP, a treatment that induces differentiation of type II cells. Microarray analysis identified 388 genes that were induced Ͼ 1.5-fold by 72 h of hormone treatment. Induced genes represented all categories of molecular function and subcellular location, with increased frequency in the categories of ionic channel, cell adhesion, surface film, lysosome, extracellular matrix, and basement membrane. In timecourse experiments, self-organizing map analysis identified a cluster of 17 genes that were slowly but highly induced (5-to ف 190-fold) and represented four functional categories: surfactant-related (SFTPC, SFTPA, PGC, SFTPB, LAMP3, LPL), regulatory (WIF2, IGF2, IL1RL1, NR4A2, HIF3A), metabolic (MAOA, ADH1B, SEPP1), and transport (SCNN1A, CLDN18, AQP4). Induction of both mRNA and protein for these genes, which included nine newly identified regulated genes, was confirmed, and cellular localization was determined in both fetal and postnatal tissue. Induction of lysosomal-associated membrane protein 3 required both hormones, and expression was localized to limiting membranes of lamellar bodies. Hormoneinduced differentiation of human type II cells is associated with genome-wide increased expression of genes with diverse functions. Keywords: cyclic AMP; epithelial differentiation; glucocorticoid; human fetal lung; type II cell Pulmonary type II cells have a number of known physiologic functions. During lung development, they are the progenitor cell for type I cells that constitute the gas exchange surface in alveoli. After lung injury, type II cells proliferate to repopulate the pulmonary epithelium. These cells participate in transepithelial movement of sodium and water to clear fetal lung fluid at birth and to maintain alveolar fluid homeostasis with air breathing. Type II cells produce a variety of cytokines, chemokines, and other proteins involved in the inflammatory response, as well as proteins that have either immunomodulary or antioxidant roles. The most specialized function of type II cells is the production and secretion of surfactant, the complex mixture of lipid and surfactant proteins (SPs) that maintains alveolar stability and is required for successful adaptation to extrauterine life (1-3). Differentiation of type II cells from undifferentiated precursor epithelial cells is marked by the disappearance of glycogen, which serves as a substrate for surfactant phospholipid synthesis, the formation of lamellar bodies, which are the intracellular storage sites for secreted surfactant, and expansion of the apical cell surface in the form of microvilli (4-7). A number of classes of proteins are developmentally increased during type II cell differentiation, including SPs, lipogenic enzymes, selected water and ion transporter/channels, metabolic enzymes, and structural p...