T1α is a recently identified gene expressed in the adult rat lung by alveolar type I (AT1) epithelial cells but not by alveolar type II (AT2) epithelial cells. We evaluated the effects of modulating alveolar epithelial cell (AEC) phenotype in vitro on T1α expression using either soluble factors or changes in cell shape to influence phenotype. For studies on the effects of soluble factors on T1α expression, rat AT2 cells were grown on polycarbonate filters in serum-free medium (MDSF) or in MDSF supplemented with either bovine serum (BS, 10%), rat serum (RS, 5%), or keratinocyte growth factor (KGF, 10 ng/ml) from either day 0 or day 4 through day 8 in culture. For studies on the effects of cell shape on T1α expression, AT2 cells were plated on thick collagen gels in MDSF supplemented with BS. Gels were detached on either day 1(DG1) or day 4 (DG4) or were left attached until day 8. RNA and protein were harvested at intervals between days 1 and 8 in culture, and T1α expression was quantified by Northern and Western blotting, respectively. Expression of T1α progressively increases in AEC grown in MDSF ± BS between day 1 andday 8 in culture, consistent with transition toward an AT1 cell phenotype. Exposure to RS or KGF fromday 0 prevents the increase in T1α expression on day 8, whereas addition of either factor from day 4 throughday 8 reverses the increase. AEC cultured on attached gels express high levels of T1α ondays 4 and8. T1α expression is markedly inhibited in both DG1 and DG4 cultures, consistent with both inhibition and reversal of the transition toward the AT1 cell phenotype. These results demonstrate that both soluble factors and alterations in cell shape modulate T1α expression in parallel with AEC phenotype and provide further support for the concept that transdifferentiation between AT2 and AT1 cell phenotypes is at least partially reversible.