This study provides a structural, functional and biochemical basis for the characterization and quantitation of normal and in vitro inactivated lung surfactant. 1. 1| Normal lung surfactant. Rabbit lung washing was centrifuged for 5 minutes at 450 g to obtain the cellular sediment A. The supernatant was centrifuged for 90 minutes at 100,000 g yielding sediment B and supernatant C. All fractions were lyophilized and weighed. In addition, sediments A and B were processed for histochemistry and electron microscopy. Surface tension measurements revealed minimum surface tension (γ min) of 0–5 dynes/cm with 5 mg of lung washing or with 2 mg of sediment B. By contrast, even with 20 mg of sediment A or supernatant C, γ min was above 18 dynes/cm. By electron microscopy sediment B was composed mainly of myeloid figures. Biochemical determinations of lyophilized fractions revealed that more than 80% of the noncellular phospholipids present in the bulk sedimented into the strongly surface active sediment B, which was found to contain an average of 721 μg phospholipids/mg dry weight, with 90% of the phospholipid being phosphatidyl choline. Fractions A and C revealed relatively low phospholipid values, 214 μg/mg dry weight and 129 μg/mg dry weight, respectively. 2. 2| In vitro inactivation of lung surfactant. (a) Interaction of lung washing with serum resulted in a seemingly reversible form of surfactant inactivation, since sediment B of the surface inactive washing-serum mixture revealed a high phospholipid content and a γ min of 0–5 dynes/cm with 2 mg of lyophilized material. (b) Following interaction of lung washing with heparinized or recalcified citrated plasma, a clot rapidly developed in the washing-plasma mixture due to the strong thromboplastic activity of surfactant. By electron microscopy the clot contained in addition to fibrinous deposits, packed macrophages, and numerous myeloid figures. Similar changes but no cells were observed in the clot formed in a mixture of cell-free surfactant suspension with plasma. Lipid analysis and isotopic tracing studies indicated that the clot incorporated 50–60% of the surfactant phopsholipids present in the plasma inactivated lung extracts. On the other hand the eluate of the washing-plasma mixture yielded a sediment B with low phospholipid content and γ min of 20–25 dynes/cm. This form of surfactant inactivation can be defined, therefore, as a coagulative type of surfactant depletion, and may represent the mechanism of surfactant deficiency and membrane formation in hyaline membrane disease of the newborn and in other pathologic conditions of the lung associated with formation of hyaline membranes.