Type II alveolar epithelial cells (pneumocytes) were isolated to purity from adult rabbits and analyzed for the presence of cell surface insulin receptors and for effects of insulin on cells. Assays were performed on cells cultured for 24 h in Eagle's minimum essential medium. Insulin binding to cells in culture approached a steady-state level by 180 min at 15 degrees C and remained constant for at least 1 h. Competition experiments using native insulin, proinsulin and desoctapeptide supported specificity of binding. Scatchard analysis of binding revealed a class of high-affinity receptors with Kd = 1.5 X 10(-10) M and a low-affinity component with Kd = 4 X 10(-9) M. The number of receptors was estimated at 2000-4000/cell. Insulin added to cell cultures of type II pneumocytes in concentrations from 5 X 10(-11) to 5 X 10(-8) M resulted in a dose-related increase in uptake of 2-deoxyglucose by cells. Insulin also stimulated the incorporation of choline and glucose into phosphatidylcholine and disaturated phosphatidylcholine.