We used the model of bilateral cervical vagotomy of adult rabbits to cause respiratory failure characterized by pulmonary edema, decreased lung compliance, and atelectasis. We documented an 18-fold increase in radiolabeled albumin leak from the vascular space into alveolar washes of vagotomy vs. sham-operated rabbits (P less than 0.01). Despite a twofold increase in percent of prelabeled saturated phosphatidylcholine secreted (P less than 0.01), the alveolar wash saturated phosphatidylcholine pool sizes were not different. The minimum surface tensions were 19.6 +/- 2.5 vs. 9.4 +/- 2.2 dyn/cm for alveolar washes from vagotomy and control rabbits, respectively (P less than 0.01). The soluble proteins from alveolar washes inhibited the surface tension lowering properties of natural surfactant, whereas those from the control rabbits did not (P less than 0.01). When vagotomy rabbits in respiratory failure were treated with 50 mg natural surfactant lipid per kilogram arterial blood gas values and compliances improved relative to control rabbits. Vagotomy results in alveolar pulmonary edema, and surfactant dysfunction despite normal surfactant pool sizes and respiratory failure. A surfactant treatment can improve the respiratory failure.