Surfactant protein B (SP-B) is a critical component of pulmonary surfactant, and a deficiency of active SP-B results in fatal respiratory failure. SP-B is synthesized by type-II pneumocytes as a 42-kDa propeptide (proSP-B), which is posttranslationally processed to an 8-kDa surface-active protein. Napsin A is an aspartic protease expressed in type-II pneumocytes. To characterize the role of napsin A in the processing of proSP-B, we colocalized napsin A and precursors of SP-B as well as SP-B in the Golgi complex, multivesicular, composite, and lamellar bodies of type-II pneumocytes in human lungs using immunogold labeling. Furthermore, we measured aspartic protease activity in isolated lamellar bodies as well as isolated human type-II pneumocytes and studied the cleavage of proSP-B by napsin A and isolated lamellar bodies in vitro. Both, napsin A and isolated lamellar bodies cleaved proSP-B and generated three identical processing products. Processing of proSP-B by isolated lamellar bodies was completely inhibited by an aspartic protease inhibitor. Sequence analysis of proSP-B processing products revealed several cleavage sites in the Nand C-terminal propeptides as well as one in the mature peptide. Two of the four processing products generated in vitro were also detected in type-II pneumocytes. In conclusion, our results show that napsin A is involved in the N-and C-terminal processing of proSP-B in type-II pneumocytes.The integrity and function of pulmonary surfactant are of paramount importance for lung function. Disturbance of surfactant activity leads to respiratory distress (1). The main function of pulmonary surfactant is the reduction of the surface tension at the air/liquid interface in the lung, thus preventing alveolar collapse at end-expiration. Pulmonary surfactant is a complex mixture of ϳ90% lipids and ϳ10% proteins that is synthesized, stored, secreted, and to a large extent recycled by type-II pneumocytes of the alveolar epithelium.The hydrophobic surfactant protein B (SP-B) 1 interacts with phospholipids and contributes to the formation of intracellular lamellar bodies, the structural rearrangement of secreted surfactant lipids into tubular myelin, as well as the subsequent rapid insertion of secreted surfactant phospholipids into the surface film (reviewed in Ref. 2). Hereditary SP-B deficiency in infants or mice leads to respiratory failure at birth (3-6). However, hereditary alveolar proteinosis in babies without any detectable mutations in the SP-B gene as well as acquired pulmonary alveolar proteinosis in children and adults are characterized by an intraalveolar accumulation of mature surfactant proteins and abnormal SP-B precursors. Furthermore, only SP-B precursors are detected in babies with congenital surfactant defects characterized by the absence of lamellar bodies in type-II pneumocytes.2 Therefore, insufficient processing of proSP-B due to a lack or dysfunction of one or more proteases involved in SP-B processing might be yet another undiscovered cause of surfactant dysfunction in p...