Recruitment and activation of mononuclear phagocytes are potentially critical regulatory events for control of pulmonary inflammation. Located at the boundary between the alveolar airspace and the interstitium, alveolar epithelial cells are ideally situated to regulate the recruitment and activation of mononuclear phagocytes through the production of cytokines in response to inflammatory stimulation from the alveolar space. To test this hypothesis, we investigated the production of monocyte chemotactic polypeptide-1 (MCP-1), a protein that is chemotactic for and that activates monocytes, by rat type II alveolar epithelial cells in primary culture. Immunocytochemical staining using anti-murine JE, an antibody recognizing rat MCP-1, demonstrated cell-associated MCP-1 Ag throughout the monolayer. The intensity of staining was increased in response to IL-1 beta. When type II epithelial cells formed a tight monolayer on a filter support, there was polar secretion of MCP-1 Ag into the apical compartment by both control and IL-1-stimulated cells as measured by specific MCP-1 ELISA. Northern blot analysis revealed that IL-1 and TNF-alpha stimulated MCP-1 mRNA expression in a dose-dependent manner, whereas dexamethasone blocked MCP-1 expression by cells stimulated with IL-1. In contrast to previous results using transformed epithelial cell lines, MCP-1 mRNA was induced in these primary cultures directly by stimulation with LPS. These data suggest that alveolar epithelial cells may have an important and previously unrecognized role in the initiation and maintenance of inflammatory processes in the lung by recruiting and activating circulating monocytes through the production of MCP-1.