Pulmonary surfactant obtained from lung lavages can be separated by differential centrifugation into two distinct subfractions known as large surfactant aggregates and small surfactant aggregates. The large-aggregate fraction is the precursor of the small-aggregate fraction. The ratio of the small non-surface-active to large surface-active surfactant aggregates increases after birth and in several types of lung injury. We have utilized an in vitro system, surface area cycling, to study the conversion of large into small aggregates. Small aggregates generated by surface area cycling were separated from large aggregates by centrifugation at 40,000 g for 15 min rather than by the normal sucrose gradient centrifugation. This new separation method was validated by morphological studies. Surface-tension-reducing activity of total surfactant extracts, as measured with a pulsating-bubble surfactometer, was impaired after surface area cycling. This impairment was related to the generation of small aggregates. Immunoblot analysis of large and small aggregates separated by sucrose gradient centrifugation revealed the presence of detectable amounts of surfactant-associated protein B (SP-B) in large aggregates but not in small aggregates. SP-A was detectable in both large and small aggregates. PAGE of cycled and non-cycled surfactant showed a reduction in SP-B after surface area cycling. We conclude that SP-B is degraded during the formation of small aggregates in vitro and that a change in surface area appears to be necessary for exposing SP-B to protease activity.