C/EBP alpha is a transcription factor which can stimulate expression of genes in lipid-metabolizing epithelial cells. We have detected an increase in mRNA for C/EBP alpha in lungs of fetal rats between days 18 and 20 of gestation, correlating with events occurring during the maturation of the surfactant system, such as an increase in the amount of surfactant protein A mRNA. We have found that C/EBP alpha mRNA levels are substantially enriched in type II alveolar epithelial cells purified from adult lung and that the C/EBP alpha protein is present in type II cell nuclei. When the type II cells are removed from the lung and purified, the protein is rapidly lost. However, both surfactant protein gene expression and C/EBP alpha reappear when cells are plated on Matrigel. Levels of C/EBP alpha mRNA from purified cells decline much more slowly than the protein and are still detectable 48 h after cells have been plated on standard tissue culture plastic. We have also detected the C/EBP alpha protein in nuclear extracts of NCI-H441, a lung-derived cell line that expresses surfactant proteins A and B, but not in A549, a lung-derived cell line which does not express the surfactant proteins. Our data suggest that C/EBP alpha is involved in the development and maintenance of the surfactant system in lung type II cells.