17 beta-Estradiol (0.44 to 4.4 micrograms/kg) was intramuscularly administered to pregnant rabbits on day 25 or 26 of gestation, and the fetuses were delivered by cesarean section 24 hr later. On light microscopy, the lungs from the treated group had larger alveoli and thinner interalveolar septa than did those from the controls at the same gestational age. The lumen:septa ratio was 0.62 +/- 0.06 in the control group and 0.88 +/- 0.05 in the treated group (p less than 0.01). Blood vessels in the lungs of the treated group were also more mature than were those in the control group. Alveolar epithelial cells consisted of 52% undifferentiated, 21% type II, and 27% type I cells in the control group. In the estrogen-treated group, the corresponding distribution was 25, 29, and 45%. There were 0.82 +/- 0.16 lamellar bodies per alveolar cell in the treated group compared to 0.38 +/- 0.06 in the controls (P less than 0.05). Estrogen decreased fetal lung glycogen content from 247 +/- 15 micrograms/mg protein to 70 +/- 9 on day 26 and from 103 +/- 13 to 13 +/- 2 on day 27 (P less than 0.001). Estrogen administration increased the rate of incorporation of choline into phosphatidylcholine in fetal lung slices, decreased the rate of thymidine incorporation into DNA, but had no effect on the rates of incorporation of ethanolamine into phosphatidylethanolamine or of leucine into protein. These data indicate that estrogen accelerates the rate of fetal lung maturation. It appears to stimulate lung differentiation at the expense of lung growth.