Using a retroviral vector expressing the adenoviral 12S E1A gene product the authors have immortalized rat type II alveolar epithelial cells. For a period of time, the immortalized cells retain many of the ultrastructural characteristics of type II cells in situ, including the presence of lamellar bodies. By 250 days in culture, however, neither lamellar bodies, SP-A, nor a phospholipid profile characteristic of surfactant were present. The cell bind the lectin Maclura pomifera and stably express cytokeratins and the E1A gene product. The cell line also has a diploid karyotype, exhibits contact inhibition of growth, and does not grow in soft agar. E1A-immortalized cell lines should prove useful as models for study of certain aspects of type II alveolar epithelial cell function.