The effects of activated leukocytes on surfactant function and composition were examined to better define the mechanisms by which acute inflammation contributes to respiratory distress syndrome (ARDS). Peripheral blood leukocytes from healthy volunteers were incubated in vitro with surfactant for 4 hours: (1) in the absence of activation; (2) following activation by addition of phorbol myristate acetate (PMA); (3) following addition of PMA + FeCl2/EDTA; (4) PMA + FeCl2; (5) PMA + EDTA; (6) PMA + FeCl2 + superoxide dismutase (SOD) + catalase; (7) PMA + EDTA + serine or cysteine protease inhibitors. Surfactant was then repurified by sucrose gradient centrifugation, and function, phospholipid and protein composition, and extent of lipid peroxidation were assessed. PMA caused activation of leukocytes as detected by dichlorofluorescene assay. Lipid peroxidation (assessed by conjugated diene assay) was detected in all samples containing PMA. Abnormal function was noted in surfactant exposed to activated cells with 1 mM EDTA, whereas activation alone, or with FeCl2, had no effect. SOD + catalase prevented lipid peroxidation, but did not prevent leukocyte-mediated dysfunction, which was associated with a marked reduction in surfactant protein A (SP-A), but no detectable change in surfactant protein B (SP-B) or phospholipid composition. Serine protease inhibitors prevented SP-A degradation and dysfunction, whereas cysteine protease inhibitors had no protective effect. Addition of purified SP-A (5% w/w) to dysfunctional surfactant restored normal function, while SP-B/C mixture (3%) did not. Activated leukocytes cause surfactant dysfunction in vitro by serine protease-mediated degradation of SP-A, which occurs only in the presence of EDTA, and is prevented by addition of calcium. Although lipid peroxidation mediated by leukocyte release of free-radical products was also detected, surfactant dysfunction appears to be unrelated to this process.