At birth water is rapidly reabsorbed from the distal lung in preparation for alveolar gas exchange. To investigate a potential role for the AQP1 water channel in development, lung membranes from fetal and perinatal rats were analyzed by immunoblot. First expression of AQP1 was noted in fetal rat lung at E19 (19th day of the 21-day gestation). The level of AQP1 increased fivefold from the last gestational day to the first postnatal day and persisted at high levels into adulthood. Maternal corticosteroids increased expression of AQP1 in fetal lung, an effect also seen in adult rats. AQP1 mRNA increased in rat pups treated with corticosteroids, suggesting at least partial regulation at the level of transcription. Immunohistochemical analyses with anti-AQP1 demonstrated the protein in peribronchial vessels and visceral pleura at E21 with increased postnatal expression. AQP1 was not expressed in airway epithelium, and only occasional alveolar pneumocytes were labeled. Immunoelectron microscopy revealed AQP1 on both apical and basolateral membranes of endothelial cells. The ontogeny and corticosteroid induction of AQP1 in rat lung coincide with major physiological alterations in lung development; however, the distribution of AQP1 predicts the existence of other water channels in the alveolar epithelium.