Surfactant protein C (SP-C), a hydrophobic protein of pulmonary surfactant is essential for surfactant function. Toward elucidating molecular mechanisms that mediate regulation of SP-C gene expression in rabbit lung, we isolated and characterized cDNAs encoding rabbit SP-C and studied the regulation of SP-C gene expression during fetal lung development and by adenosine 3',5'-cyclic monophosphate (cAMP) and dexamethasone in fetal lung tissues in vitro. We found that rabbit SP-C is highly homologous to SP-C of other species and is encoded by two mRNAs that differ by an insertion of 31 nucleotides in the 3' untranslated regions. SP-C mRNAs were classified into two types based on the nucleotide sequence; type I represents RNA without the 31 nucleotide insert and comprises approximately 80-90% of total SP-C mRNA content, whereas type II represents RNA containing the insert and comprises approximately 10-20% of total SP-C mRNA content. SP-C mRNAs were induced in a coordinate manner during fetal lung development and by cAMP and dexamethasone in fetal lung tissues in vitro. Southern hybridization analysis of genomic DNA suggested that SP-C mRNAs are encoded by a single gene. Polymerase [corrected] chain reaction-amplification of genomic DNA with oligonucleotide primers flanking the insertional sequence and sequence analysis of amplified DNA showed that SP-C mRNAs are produced by alternative use of 3' splice sites of intron 5 of SP-C gene.