Alveolar epithelial type II cells, a major source of angiotensin-converting enzyme (ACE)-2 in the adult lung, are normally quiescent but actively proliferate in lung fibrosis and downregulate this protective enzyme. It was, therefore, hypothesised that ACE-2 expression might be related to cell cycle progression. To test this hypothesis, ACE-2 mRNA levels, protein levels and enzymatic activity were examined in fibrotic human lungs and in the alveolar epithelial cell lines A549 and MLE-12 studied at postconfluent (quiescent) versus subconfluent (proliferating) densities. ACE-2 mRNA, immunoreactive protein and enzymatic activity were all high in quiescent cells, but were severely downregulated or absent in actively proliferating cells. Upregulation of the enzyme in cells that were progressing to quiescence was completely inhibited by the transcription blocker actinomycin D or by SP600125, an inhibitor of c-Jun N-terminal kinase (JNK). In lung biopsy specimens obtained from patients with idiopathic pulmonary fibrosis, immunoreactive enzyme was absent in alveolar epithelia that were positive for proliferation markers, but was robustly expressed in alveolar epithelia devoid of proliferation markers. These data explain the loss of ACE-2 in lung fibrosis and demonstrate cell cycle-dependent regulation of this protective enzyme by a JNK-mediated transcriptional mechanism.