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THE LUNGS of mammals and many other vertebrates contain surface active material in the peripheral air spaces. This material, comprised of various lipids and proteins, gives rise to a phospholipid monolayer which lines lung alveoli. The lipid monolayer stabilizes alveoli at low lung volumes, preventing collapse and allowing for normal respiration. A developmental deficiency of pulmonary surfactant in infants who are born prematurely results in respiratory distress syndrome (hyaline membrane disease) of the newborn infant. This disease is characterized by progressive atelectasis, inadequate oxygenation, and eventual respiratory failure, and it is the major cause of morbidity and mortality in premature infants. Regulation of lung development during fetal life has been studied extensively since 1969. In that year, Liggins (1) first demonstrated a stimulatory effect of dexamethasone infusion on lung aeration in prematurely delivered lambs. His pioneering observations have been confirmed by many investigators (reviewed in Ref. 2), and it is now established that glucocorticoid treatment of the fetus accelerates most, if not all, aspects of lung development. In addition, several other hormones are now known to either stimulate or inhibit pulmonary differentiation.