The hypothesis that the surface tension of the fluid film which lines the lung alveoli reduces the pericapillary pressure in air-filled lungs was tested by perfusing the excised lungs of dogs with saline, 6% dextran in saline, and blood. After almost maximal inflation with air from low volumes or the degassed state (inflation state) the pulmonary arterial pressure, relative to the base of the lungs, was lower than the alveolar pressure with flows up to 50 ml/min. It was higher than the alveolar pressure at any flow when the air-liquid interface had been abolished by filling the lungs to the same volume with fluid. The pulmonary arterial pressure at the same flow and alveolar pressure was lower in the inflation state than after deflation from higher volumes (the deflation state). However, lung volume was larger in the deflation state. The possibility of some low resistance channels in the inflation state could not be excluded. However, histological examinations showed that the alveolar capillaries were patent and failed to show any airless lung. pulmonary circulation; pericapillary pressure in lungs; surface tension and pulmonary vascular resistance Submitted on July 29, 1963