In the present study, we characterized the proteins associated with a purified lamellar body fraction isolated from human fetal lung explants. We then raised antibodies directed against the major human surfactant apoprotein, a 35-K glycoprotein, and used the technique of immunoblot analysis to evaluate the content of the surfactant apoprotein in human fetal lung explants maintained in serum-free medium in vitro. We found that the 35K surfactant apoprotein was undetectable in homogenates of fetal lung tissue before culture; the surfactant apoprotein was induced in the cultured explants coincident with the appearance of differentiated type II cells. Insulin, at concentrations as low as 2.5 ng/ml, caused marked inhibition of the accumulation of the 35K protein in the cultured fetal lung tissue. The inhibitory effect of insulin was dose dependent and was apparent as early as day 2 of incubation. When explants were cultured in medium containing insulin plus cortisol, the amount of immunoreactive surfactant apoprotein was reduced compared to that of explants cultured in control medium or explants cultured with cortisol alone. On the other hand, as reported previously, insulin and cortisol, in combination, stimulated phosphatidylcholine synthesis. These findings are indicative that the phospholipid and apoprotein components of surfactant are regulated independently. The results of our studies suggest that fetal hyperinsulinemia may cause the production of a surfactant deficient in the 35K apoprotein, and this may provide an explanation for the increased incidence of respiratory distress syndrome in infants of diabetic mothers.