Type II alveolar cells, recognized by their characteristic lamellar inclusion bodies, synthesize and secrete pulmonary surface-active material (1-3). In 1954, Macklin (4) postulated that these cells, which he called" granular pneumonocytes," secrete material that provides low surface tension at the air-liquid interface, enhances clearance of inhaled particles, is bacteriostatic, and helps prevent transudation of interstitial fluid into the alveolar space. Macklin (4) also reported that these cells proliferate after injury of the lung by osmium tetroxide fumes. Thus, the potential functions of type II alveolar cells were outlined more than 20 years ago, but we are now just beginning to examine these functions in detail. The recent development of techniques for isolating and culturing type II cells enables investigators to study these cells directly and should provide a more complete understanding of their biochemical and cellular physiologic features (2, 5-13). In this report, we describe the possible functions of type II cells and some recent studies on phospholipid synthesis by primary cultures of type II cells. We conclude with some cautionary