Cyclooxygenase (COX)-2 has been shown to be involved in regulating basal airway function, bacterial LPS-induced airway hyperresponsiveness (AHR) and lung inflammation, and bleomycin-induced lung fibrosis; however, the cellular source of COX-2 that underlies these effects is unknown. We generated mice with alveolar type II (ATII) cell-specific knockdown of COX-2 (AT2CC(-/-)), to examine the role of ATII cell-derived prostaglandins (PGs) in these processes. Specific knockdown of COX-2 was confirmed by real-time RT-PCR and Western blot analyses. LC/MS/MS analysis showed that ATII cells produced PGs. Basal airway responsiveness of AT2CC(-/-) mice was decreased compared to that of wild-type (WT) mice. LPS-induced hypothermic response, infiltration of inflammatory cells into the airway, and lung inflammation were enhanced in AT2CC(-/-) mice relative to WT controls; however, LPS-induced AHR and proinflammatory cytokine and chemokine expression were similar between the genotypes. After 21 d of bleomycin administration, AT2CC(-/-) mice behaved in a manner similar to WT mice. Thus, ATII cell-derived COX-2 plays an important role in regulating basal airway function and LPS-induced lung inflammation, but does not play a role in bleomycin-induced fibrosis. These findings provide insight into the cellular source of COX-2 related to these lung phenotypes.