Human lung epithelial cells have been cultured and characterized for phospholipid content. Any residual fibroblasts were removed by selective trypsinization within the first 48 hours in culture. Epithelial cells were serially subpassaged when cultures reached ca. 80% confluency. Electron microscopic evaluation of both monolayers and cell suspensions showed cultures to be composed of a single cell type. These cells had a microvillar free surface and were attached by descosomes which characterized them as epithelial. They contained lamellar inclusions which is typical of type II cells. Fetal lung (age 18-20 weeks) cell suspension processed for electron microscopy prior to culturing showed cells to be undifferentiated, epithelial-like with small microvilli along cell borders and desmosomes at cell cultured epithelial cell deconstrated that the lamellar inclusions were not observed in these cells. Ultrastructural studies of the cultured epithelial cell demonstrated that the lamellar inclusions had a slightly positive reaction when tested for acid phosphatase.