Fetal lung cells from 28 day gestation rabbits cultured in the presence of cortisol (5.5 times 10 - minus 6M) or dexamethasone (5.5 times 10- minus 8M) incorporated [3-H] choline into lecithin to a significantly greater extent than did control cultures. 11-Deoxycortisol, 21-deoxycortisol and 11beta-hydroxyprogesterone, at a concentration of 5.5 times 10- minus 5 M, had no effect on lecithin synthesis. However, when lung cells were simultaneously exposed to these steroids and to cortisol at the concentrations quoted, [3-H] choline incorporation was reduced to control values. Cortisone (5.5 times 10- minus M) also enhanced lecithin synthesis, the activity of the steroid likely being related to the capacity of the lung cells to convert cortisone to cortisol. This hypothesis was supported by the observations that 11-ketoprogesterone (1.3 times 10- minus 5M), which totally inhibited the conversion of cortisone to cortisol and which had no effect of its own on [3-H] choline incorporation, inhibited the effect of cortisone on lecithin synthesis but not that of cortisol. These data support the view that glucocorticoids affect lung cell maturation in a manner comparable to the interaction of other steroid hormones with their target tissues. The capacity of the fetal lung to convert cortisone to cortisol may be physiologically significant in light of the high concentration of 11-oxo-steroids in the fetal circulation throughout pregnancy.