The alveolar type II cell performs many important functions within the lung, including regulation of surfactant metabolism, ion transport, and alveolar repair. Because type II cells comprise only 15% of all lung cells, it is difficult to attribute specific functions to type II cells from studies of whole lungs or mixed cell cultures. At the present time, there is no passaged line that exhibits the full range of known type II cell functions. For these reasons, investigators have used isolated type II cells to study alveolar cell biology, biochemistry, and molecular biology. This review addresses many of the issues involved in isolating and culturing type II cells, including the choice of a method of isolating cells, the importance of using specific markers of the differentiated type II cell phenotype, and the problems of maintaining these differentiated phenotypic characteristics in tissue culture.