Alveolar Type II epithelial cells dedifferentiate rapidly in vitro. Studies with animal tissue suggest that cell-cell and extracellular matrix-cell interactions are important in the retention of Type II cell morphology in vitro. Thus, in this study with human tissue, alveolar Type II cells, alveolar macrophages, and spindle cells were prepared from the same sample of lung (obtained following lobectomy for cancer, n = 3), cocultured on glass cover slips or tissue culture plastic, and studied by light microscopy with scanning (SEM) and transmission (TEM) electron microscopy for 8 days. The primary cell isolates contained approximately 45% Type II cells; the remainder were macrophages or unidentifiable cells. Clusters, made up of a single layer of cuboidal Type II cells around a central core of connective tissue (largely collagen and some elastic tissue), formed above a monolayer of spindle cells. The Type II cells were morphologically similar to those seen in vivo. The cells were still cuboidal at 8 days but had lost their lamellar bodies, which were released into the medium via the apical surface. The clusters increased in size with time (area, microns 2: day 1, 29(5-143) x 10(2); day 8, 63(10-311) x 10(2); mean(range); p less than 0.02) without changing in number per culture, suggesting Type II cell proliferation. This may have been due to factors produced by the other cells and adherence to the extracellular matrix (ECM); (free collagen fibers, present in the original preparation, spindle cells, and/or Type II cells could be responsible for presence of ECM). We propose this as a useful model for the study of human Type II epithelial cells in vitro.