Pulmonary surfactant is a developmentally and hormonally regulated lipoprotein synthesized exclusively in alveolar type II cells. Surfactant protein-A (SP-A) gene transcription in human fetal lung in culture is stimulated by glucocorticoids and cAMP; cAMP also enhances the rate of type II cell differentiation. The CCAAT/enhancer-binding protein (C/EBP) family of transcription factors serves an important role in the regulation of genes involved in energy metabolism, lipid biosynthesis, and cellular differentiation. The gene encoding C/EBPdelta, which is induced by glucocorticoids during the early phases of adipocyte differentiation, is expressed at relatively high levels in lung compared with other tissues. In the present study we have analyzed developmental changes in C/EBPdelta messenger RNA levels in fetal rabbit lung as well as changes in the levels of immunoreactive C/EBPdelta in human fetal lung during differentiation in organ culture and after treatment with cAMP and glucocorticoids. We observed that C/EBPdelta messenger RNA is detectable in fetal rabbit lung on day 19 of gestation and is increased approximately 3.7-fold to maximum levels on day 28 of gestation, the time when SP-A gene transcription increases to maximum levels. Immunohistochemical analysis of C/EBPdelta in midgestation human fetal lung before culture revealed trace nuclear staining in epithelial and occasional stromal cells. After 12 h of organ culture in serum-free medium, nuclear staining of C/EBPdelta was markedly increased in epithelial cells lining the prealveolar ducts of the human fetal lung tissue. By immunoblot analysis, it was found that C/EBPdelta levels were induced rapidly during organ culture in control medium and were increased further by treatment with dexamethasone and (Bt)2cAMP. C/EBPdelta levels were maximally induced during the first 24 h of culture and declined thereafter; after 72 h of incubation in control or cAMP-containing medium, C/EBPdelta was reduced markedly. By contrast, in fetal lung tissues incubated in medium containing dexamethasone or dexamethasone plus (Bt)2cAMP, the decline in C/EBPdelta was more modest, so that levels remained elevated throughout the 96-h culture period. Our findings that C/EBPdelta is localized primarily to alveolar epithelial cells, rapidly induced during differentiation of human fetal lung in culture, and increased by cAMP and glucocorticoids suggest a possible role in the regulation of type II cell differentiation and in the synthesis of surfactant phospholipids and proteins.