Human lung alveolar epithelial cells constitutively express class II major histocompatibility complex (MHC). Human lung microvascular endothelial and small airway epithelial cells can be induced to express class II MHC by stimulation with the pro-inflammatory cytokine interferon-gamma. The levels of class II MHC on lung epithelial and endothelial cells were comparable to those seen on an Epstein-Barr virus (EBV)-transformed B-cell line. However, the costimulatory molecules B7-1 and B7-2 were not expressed. The ability of the class II MHC expressing human lung parenchymal cells to present alloantigen to CD4+ T lymphocytes was investigated. Freshly isolated human alveolar epithelial cells (type II pneumocytes) and monolayers of interferon-gamma-stimulated small airway epithelial and lung microvascular endothelial cells were co-cultured with allogeneic CD4+ T lymphocytes and proliferation determined by [3H]thymidine incorporation. A clear difference was observed between effects of the epithelial and endothelial cells on CD4+ T-lymphocyte activation. Alveolar and small airway epithelial cells failed to stimulate the proliferation of allogeneic CD4+ T lymphocytes whereas lung microvascular endothelial cells did stimulate proliferation. This difference could not be explained by the levels of class II MHC or the lack of B7-1 and B7-2 solely. Microvascular endothelial cells, and not alveolar or small airway epithelial cells, possess B7-independent costimulatory pathways.