The pulmonary host response to infection and inflammation appears, at least in part, to be compartmentalized from the systemic host response. Tumor necrosis factor-alpha (TNF-alpha) has been implicated in lung inflammation and injury, but its site(s) of action has not been clearly defined. To investigate this, transgenic mice (surfactant apoprotein C promotor/soluble TNF receptor type II-Fc fusion protein ([SPCTNFRIIFc] mice) were generated in which TNF-alpha was selectively antagonized in the distal lung through tissue-specific expression of sTNFRIIFc, a soluble TNF inhibitor. The lung inflammatory response in these mice to pulmonary challenge with Micropolyspora faeni antigen or lipopolysaccharide (LPS) was compared with the response of wild-type mice, wild-type mice treated with recombinant sTNFRIIFc intravenously, and type I TNF-receptor knockout mice. Recruitment of polymorphonuclear leukocytes (PMN) to the lung after challenge with M. faeni antigen was essentially abolished in the TNFRI knockout mice and markedly reduced in the SPCTNFRIIFc mice. Wild-type mice given sTNFRIIFc intravenously in amounts resulting in lung concentrations similar to those in SPCTNFRIIFc mice also showed significantly reduced lung PMN recruitment, whereas those given doses that achieved such concentrations in the blood but low levels in the lung did not. In contrast, PMN recruitment to the lung following aerosol challenge with LPS was reduced significantly in the TNFRI knockout mice and in mice given high-dose sTNFRIIFc intravenously, but was not reduced significantly in SPCTNFRIIFc mice. Thus, inhibition of PMN recruitment in response to M. faeni antigen correlated largely with the extent of intrapulmonary inhibition of TNF-alpha, whereas the response to LPS correlated best with the extent of extrapulmonary inhibition of TNF-alpha. These studies indicate that TNF-alpha may act at different loci to mediate lung inflammation, with the site of action depending in part on the nature of the inflammatory stimulus, and that SPCTNFRIIFc mice provide a tool by which the locus of TNF action can be addressed.