The role of type II epithelial cell proliferation in repair of diffuse alveolar epithelial injury was examined using two pneumotoxicants, 3-methylindole (3-MI) and monocrotaline (MCT). It was hypothesized that if MCT inhibits type II epithelial cell mitosis, then pulmonary fibrosis would result after diffuse 3-MI-induced type I alveolar cell injury in rats preadministered MCT. Four groups of rats were given vehicle control, MCT, 3-MI, or MCT and 3-MI. Lungs from rats killed 4 days post-treatment were examined subjectively and quantitatively by light and electron microscopy. Proliferative stimulus was estimated by bromodeoxyuridine (BrdU) incorporation. Lungs from rats killed 2 weeks post-treatment were evaluated by light microscopy. At 4 days, the number of type II cells in the lungs of 3-MI-treated rats was 3 times greater than in the lungs of the dually (MCT/3-MI) treated rats which was the same as the control rat lungs. There was no significant difference between the MCT/3-MI-treated rats and the 3-MI-treated rats with regard to the percentage of denuded alveolar basement membrane. The number of BrdU-labeled type II epithelial cells was increased above the control in both 3-MI-treated groups, but was greater in the 3-MI-treated rat lungs than in the lungs of the MCT/3-MI-treated rats. The average type II cell volume in dually treated rats was 3 times the volume in the control animals and 50% greater than that in 3-MI-treated rats. Transmission electron microscopy of the lungs of the MCT/3-MI-treated rats demonstrated flattened hypertrophic type II cells over large portions of the basement membrane. The light microscopic appearance and collagen staining of the lungs of the dually treated rats were similar to the negative control rat lungs 2 weeks after dosing with 3-MI. This suggests that despite a proliferative stimulus, MCT inhibits type II cell division after diffuse alveolar type I cell injury, but that type II cell migration and coverage of the basal lamina proceed. Results of this study suggest that coverage of the denuded basal lamina by any method is sufficient to prevent interstitial alveolar fibrosis.