Proliferation of alveolar type II cells after lung injury is crucial for repair of the epithelium. Because an influx of macrophages occurs as part of the inflammatory response associated with acute lung injury and macrophages produce mitogenic factors for a variety of cell types, experiments were conducted to determine if macrophages stimulated DNA synthesis in type II cells. Dialyzed medium conditioned by macrophages consistently stimulated type II cell DNA synthesis, whereas medium conditioned by a variety of other cell types did not. A SV40-transformed macrophage cell line, produced in our laboratory, also secreted substance(s) that enhanced 3H-thymidine incorporation into type II cells. In addition, coculturing rat alveolar macrophages with type II cells stimulated DNA synthesis in the epithelial cells. As determined by autoradiography, the addition of macrophages to type II cells cultured on plastic or on an endothelial cell extracellular matrix increased the labeling index of the epithelial cells from 1 to 15% and from 19 to 51%, respectively. The culture conditions that promoted the greatest increase in DNA synthesis, as well as an increase in cell number, occurred with type II cells plated on an extracellular matrix in medium containing macrophage-conditioned medium, cholera toxin, insulin, and epidermal growth factor. The results suggest that substances secreted by macrophages play a role in regulating alveolar type II cell proliferation in vivo.