It is generally held that the terminal lung unit (TLU) is an agglomeration of alveoli that opens into the branching air spaces of respiratory bronchioles, alveolar ducts, and alveolar sacs and that these structures are covered by a continuous thin liquid layer bearing a monomolecular film of surfactants at the open gas-liquid interface. The inherent structural and functional instability given TLUs by a broad liquid surface layer of this nature has been mitigated by the discovery that the TLU surface is in fact an agglomeration of bubbles, a foam (the alveolar surface network) that fills the TLU space and forms ultrathin foam films that 1) impart infrastructural stability to sustain aeration, 2) modulate circulation of surface liquid, both in series and in parallel, throughout the TLU and between TLUs and the liquid surface of conducting airways, 3) modulate surface liquid volume and exchange with interstitial liquid, and 4) sustain gas transfer between conducting airways and pulmonary capillaries throughout the respiratory cycle. The experimental evidence, from discovery to the present, is addressed in this report. Lungs were examined in thorax by stereomicroscopy immediately from the in vivo state at volumes ranging from functional residual capacity to maximal volume (Vmax). Lungs were then excised; bubble topography of all anterior and anterolateral surfaces was reaffirmed and also confirmed for all posterior and posterolateral surfaces. The following additional criteria verify the ubiquitous presence of normal intraalveolar bubbles. 1) Bubbles are absent in conducting airways. 2) Bubbles are stable and stationary in TLUs but can be moved individually by gentle microprobe pressure. 3) Adjoining bubbles move into the external medium through subpleural microincisions; there is no free gas, and vacated spaces are rendered airless. Adjacent bubbles may shift position in situ, while more distal bubbles remain stationary. 4) The position and movement of "large" bubbles identifies them as intraductal bubbles. 5) Transection of the lung reveals analogous bubble occurrence and history in central lung regions. 6) Bubbles become fixed in place and change shape when the lung is dried in air; the original shape and movement are restored when the lung is rewet. 7) All exteriorized bubbles are stable with lamellar (film) surface tension near zero. 8) Intact lungs prepared and processed by the new double-embedding technique reveal the intact TLU bubbles and bubble films. Lungs were also monitored directly by stereomicroscopy to establish their presence, transformations, and apparent function from birth through adulthood, as summarized in the following section. Intraalveolar bubbles and bubble films (the unit structures of the alveolar surface network) have been found in all mammalian species examined to date, including lambs, kids, and rabbit pups and adult mice, rats, rabbits, cats, and pigs. Rabbits were used for the definitive studies. 1) A unit bubble occupies each alveolus and branching airway of the TLU; unit bubbles in clusters correspond with alveolar clusters. 2) The appositions of unit bubble lamellae (films) form a network of liquid channels within the TLUs. The appositions are bubble to bubble (near alveolar entrances, at pores of Kohn, and between ductal bubbles), bubble to epithelial cell surface, and bubble to surface liquid of conducting airways. They rapidly form stable Newtonian black foam films (approximately 7 nm thick) under hydrodynamic conditions expected in vivo. 3) Lamellae of the foam films and bubbles tend to exclude bulk liquid and thus maintain near-zero surface tension. At the same time, the foam film formations--abetted by the constant but small retractive force of tissue recoil--stabilize unit bubble position within the network. 4) Unit bubble mobility in response to applied force increases as liquid accumulates within the network (e.g. (ABSTRACT TRUNCATED)