Pulmonary surfactant reduces the surface tension of the alveolar air-liquid interface, thereby providing mechanical stability and preventing alveolar atelectasis. More than 50% of surfactant is dipalmitoyl phosphatidylcholine, a material that is capable of reducing the surface tension of the alveolar interface to uniquely low values. The functions of the remaining 25% unsaturated phosphatidylcholines, 5–10% phosphatidylglycerol, 5% cholesterol, and 8–10% protein are unknown. Surfactant is synthesized by alveolar epithelial type II cells and is probably secreted as a lipoprotein complex. Lamellar bodies, which distinguish type II cells, are likely to be intracellular sites of transport of processing. The catabolism of surfactant after it is secreted into the alveolar lumen is complicated and involves different turnover times for the phosphatidylcholines, phosphatidylglycerol, and the proteins. The metabolic events are under hormonal control and may involve an interplay between beta-adrenergic agonists cAMP, and prostaglandins. In disease, such as the neonatal and adult respiratory distress syndromes, derangements in the metabolic processes may produce surfactant that is abnormal with respect to its chemical and physical properties.