The acute respiratory distress syndrome (ARDS) is characterized by non-cardiogenic pulmonary edema and flooding of the alveolar air spaces with proteinaceous fluid. ARDS develops in response to inflammatory stresses including sepsis, trauma, and severe pneumonia, and despite aggressive critical care management, it still has a mortality of 30–50%. At the time of its original description in 1967, relatively little was known about the specific mechanisms by which the alveolar epithelium regulated lung fluid balance. Over the last 20 years, substantial advances in our understanding of the alveolar epithelium have provided major new insights into how molecular and cellular mechanisms regulate the active transport of solutes and fluid across the alveolar epithelium under both normal and pathological conditions. Beginning with the elucidation of active sodium transport as a major driving force for the transport of water from the air space to the interstitium, elegant work by multiple investigators has revealed a complex and integrated network of membrane channels and pumps that coordinately regulates sodium, chloride, and water flux in both a cell- and condition-specific manner. At the Experimental Biology Meeting in San Francisco on April 4, 2006, a symposium was held to discuss some of the most recent advances. Although there is still much to learn about the mechanisms that impair normal alveolar fluid clearance under pathological conditions, the compelling experimental findings presented in this symposium raise the prospect that we are now poised to test and develop therapeutic strategies to improve outcome in patients with acute lung injury.