Acute extrinsic allergic alveolitis was experimentally induced in rabbits using horseradish peroxidase (HRP) as antigen. Broncho-alveolar lavage was performed on the excised lungs and total and differential cellular yields determined, and correlated with the histopathological changes in the lungs as well as the total and differential white blood cell counts. After a single parenteral immunization with HRP without adjuvants, and weekly aerosol challenges with nebulized HRP solution for 3 consecutive weeks, a 3-fold increase in the total cell count as well as a very pronounced rise in the percentage of lymphocytes was noticed. Histopathologically, the bronchi-associated lymphoid tissue (BALT) became more prominent, an increase in the number of foreign body giant cells was noticed and a focal interstitial and intra-alveolar accumulation of lymphocytes, granulocytes and macrophages could be demonstrated, as well as a mild hyperplasia of type 2 alveolar epithelial cells. Intramuscular injections of methylprednisolone acetate (Depo-Medrol) every 72 hours induced a pronounced peripheral lymphopenia, thymic involution and an almost complete disappearance of the BALT in both the control and HRP-challenged rabbits. Similarly, a marked decrease in the total cell count and percentage of lymphocytes was noticed in the broncho-alveolar fluid of the animals with hypersensitivity pneumonitis. No signs of interstitial or intra-alveolar reactions were seen in the lungs of the experimental animals after 3 weeks of aerosol antigen challenge when treated with steroids. Collectively, these data suggest that the development of hypersensitivity pneumonitis was, at least in part, due to a cell-mediated immunological reaction in the lung. This animal model in which steroid suppression of experimental allergic alveolitis has been demonstrated, may be employed to elucidate the cellular pathogenesis of this disease process.