We have studied the relationship between lysosomes and lamellar bodies in alveolar type II (ATII) pneumocytes using a monoclonal antibody (anti-lgp-120) directed against a 120-kD rat lysosomal membrane glycoprotein and a polyclonal antibody (anti-SP-A) directed against rat surfactant protein A. The anti-lgp-120 precipitated a protein molecular mass of 120 kD from Triton cell lysates radiolabeled with [35S]methionine, and the anti-SP-A precipitated surfactant apoprotein A from the medium when analyzed under similar conditions. When ATII cells were cultured on Engelbreth-Holm-Swarm tumor basement membrane, and studied by indirect immunofluorescence, some structures seem to react with both antibodies, and others with only one. ATII cells cultured on plastic showed a major population of large vesicles that were labeled intensely with both antibodies, and a second population of vesicles that were labeled weakly and only with anti-SP-A. Analytical cell fractionation of freshly isolated ATII cells confirmed that lgp-120 was only present in structures containing the lysosomal matrix enzyme N-acetyl-beta-glucosaminidase. In contrast, SP-A was identified in two populations of vesicles with high phospholipid-to-protein ratios: one lacked N-acetyl-beta-glucosaminidase and lgp-120 and contained lamellar bodies; the other contained both lysosomal markers and a heterogeneous population of organelles that included multivesicular bodies, lamellar bodies, and lysosomes. Western blots of trichloroacetic acid precipitates of cell fractions identified proteins within the lysosomal compartment that reacted with anti-SP-A, but whose molecular mass was less than 28 kD. The results indicate that, in ATII cells, surfactant is located in two functionally distinct structures, one of which is probably involved in surfactant secretion, and the other, surfactant degradation. The techniques developed in this study should allow the role of these structures in the secretion and recycling of surfactant to be determined.