11beta-Hydroxysteroid dehydrogenase type 1 (11beta-HSD1) behaves predominantly as an oxoreductase converting the receptor-inactive glucocorticoids to their active forms in vivo, while the type 2 isoform (11beta-HSD2) possesses only dehydrogenase activity and inactivates cortisol in human or corticosterone in rat. We determined enzyme activity of 11beta-HSD in rat lungs from fetus to adult, and examined whether 11beta-HSD1 exists in alveolar type II cells, the most important site for the synthesis of pulmonary surfactant in mature lungs, by immunohistochemistry and reverse transcription-polymerase chain reaction (RT-PCR). Enzyme activity of 11beta-HSD1 and 2 in lung tissue homogenate were determined as NADP(+)- and NAD(+)-dependent conversion of corticosterone to 11-dehydrocorticosterone, respectively. We found that 11beta-HSD1 activity was increased progressively from 21 days gestation to 7 weeks after birth. 11beta-HSD2 activity was significantly lower than that of 11beta-HSD1 throughout gestation and after birth. Immunoreactivity for 11beta-HSD1 was detected in the cytoplasm of the cells in the alveolar region of adult rats. Some of these expressing 11beta-HSD1 were considered to be alveolar type II cells, because of their cuboid shape and localization at the corner of the alveoli. RT-PCR demonstrated 11beta-HSD1 mRNA in isolated alveolar type II cells. Our results suggest that alveolar type II cells enhance intracellular glucocorticoid availability via 11beta-HSD1. 11beta-HSD1 in alveolar type II cells is thought of as an autocrine amplifier of glucocorticoid action in the lung.