Little is known about alterations in cell cycle regulatory proteins such as p53 and WAF1 in diffuse alveolar damage (DAD). We hypothesized that up-regulation of p53 and WAF1 in type II pneumocytes in DAD is associated with underlying DNA damage and apoptosis. Twenty cases of DAD and twenty control specimens of lung adjacent to resected tumors were studied. Immunohistochemical stains with antibodies recognizing p53 and WAF1 were performed, and apoptosis was assessed in sixteen cases by the nick end-labeling method. We identified p53 expression and apoptosis in all cases of DAD but not in any of the control lungs. We detected WAF1 expression in nineteen of twenty cases of DAD and in sixteen of twenty control lungs. In general, the distribution and intensity of WAF1 staining were greater in DAD than in control lungs. Staining for both p53 and WAF1 and labeling of apoptotic cells in DAD were usually focal ( < 10% of cells) and predominantly localized in type II pneumocytes. We conclude that increased p53 and WAF1 expression in DAD reflects normal physiological up-regulation in response to cellular and DNA damage and is associated with apoptosis of type II pneumocytes. p53-dependent apoptosis may contribute to the pathogenesis of this disease.