Bronchioloalveolar carcinoma (BAC) of the lung is a controversial form of adenocarcinoma with varying presentations. The 1977 to 1988 Lung Study Group experience with this tumor was reviewed to more precisely define the incidence of recurrence and survival of surgically resected and staged patients, to determine the incidence of BAC in the adenocarcinoma population, and to evaluate the impact of age, sex, smoking, and chronic lung-disease history on the incidence of BAC. Of 1635 patients reviewed, 235 patients had pure BAC. It was found that resectable BAC presents at an earlier disease stage than does adenocarcinoma; BAC occurs more frequently in older patients and in those without smoking history or chronic lung disease than adenocarcinoma; BAC patients have less weight loss, brain recurrences, and recurrences without second primaries than adenocarcinoma; survival and recurrence-free survival are better for BAC than for non-BAC adenocarcinoma and large-cell carcinoma; early BAC survival is better than squamous-cell survival but after 2 years is equivalent; T1-N0 BAC patients have recurrence and survival rates similar to squamous-cell survival rates and better than non-BAC adeno survival rates; T1-N1/T2-N0 and Stage 2 and 3 BAC recurs more frequently than either squamous-cell or non-BAC adenocarcinoma; stage 2 and 3 BAC has a higher mortality rate than does squamous-cell carcinoma or non-BAC adenocarcinoma; BAC is a favorable prognostic factor when adjusted for extent of disease and age; and BAC's better prognosis is a result of presenting at an earlier stage of disease and because it appears to be less aggressive than other adenocarcinomas even after adjustment for extent of disease and other known prognostic factors. It is concluded that early diagnosis and resection are particularly important for patients with BAC.