The aim of this study was to describe and compare the ultrastructural features and functional maturity of alveolar epithelial cells in hypoplastic and normal fetal rat lungs. Pulmonary hypoplasia in association with congenital diaphragmatic hernia was induced in fetuses by administration of 2,4-dichlorophenyl-p-nitrophenylether (Nitrofen) to pregnant Sprague Dawley rats (100 mg on day 10 of gestation). Lung tissue of Nitrofen-exposed and control fetal rats aged 19-22 days (vaginal plug day 1, birth day 23) was embedded in Epon. Semithin (1 micron) toluidine blue-stained sections were examined by light microscopy; ultrathin sections (approximately 80 nm) were studied via transmission electron microscopy. In bronchoalveolar lavage fluid from control and Nitrofen-exposed fetuses (day 22), phospholipid fractions and surfactant protein A content were measured semiquantitatively. On day 19 both control and Nitrofen-exposed lungs contained only cuboid alveolar epithelial cells; from day 20 there were cuboid, low cuboid, and thinner epithelial cells. The (low) cuboid cells contained large glycogen fields, some precursory stages of multilamellar bodies (MLBs), and just a few mature MLBs on day 19 and 20; smaller glycogen fields, more precursory stages, and more mature MLBs on day 21; and little or no glycogen but many precursory stages and mature MLBs on day 22. The thinner cells contained little or no glycogen and a few precursory stages of MLBs on days 20-22; very thin cells on day 22 contained neither glycogen nor any precursory stages of MLBs. MLBs and tubular myelin were seen in the lumens of future air spaces from day 20 onward. Nitrofen-exposed lungs differed from control lungs in that inclusion bodies (IBs) were less numerous in (low) cuboid alveolar cells on days 19 and 20, and more glycogen was seen on day 22. In addition intra- and extracellular "MLBs" in exposed lungs more often had an unusual appearance, i.e., a confluent structure and higher electron density. However, despite morphologic differences, there was no clear difference in phospholipid composition and SP-A content per mol phospholipid in bronchoalveolar lavage fluid. We conclude that morphologically hypoplastic lungs are less mature near term, without an apparent effect on surfactant composition.