Vascular endothelial growth factor-A (VEGF) is a potent regulator of vascular permeability, inflammatory response, and cell survival in the lung. To explore the functions of VEGF produced locally in type II pneumocytes, we generated mice with a conditional deletion of VEGF-A using Cre recombinase driven by the human surfactant protein C (SPC) promoter. In 7- to 10-week-old VEGF-knockout (SPC-VEGF-KO) mice, lung histology and physiology were essentially normal, except for higher dynamic lung compliance and lower pulmonary vascular permeability. Emphysema was seen in 28- to 32-week-old animals. To investigate the role of type II pneumocyte-derived VEGF in acute lung injury, we challenged 7- to 10-week-old SPC-VEGF-KO mice and their wild-type littermates with intestinal ischemia-reperfusion. Bronchoalveolar lavage fluid total cell count, pulmonary permeability, and lung injury score were significantly attenuated, and total lung VEGF levels were significantly lower in SPC-VEGF-KO mice compared with wild-type controls. In SPC-VEGF-KO mice, activated caspase 3-positive type II epithelial cells were increased after intestinal ischemia-reperfusion, even though there was no significant difference in the total number of cells positive for terminal deoxynucleotidyl transferase dUTP nick-end labeling. We conclude that VEGF in type II cells helps protect alveolar epithelial cells from caspase-dependent apoptosis. However, VEGF produced from type II cells may contribute to increased vascular permeability during acute lung injury.