Substance P, an eleven amino acid neuropeptide, significantly inhibited release of [3H]phosphatidylcholine from pulmonary Type II epithelial cells in vitro. Basal release and release in response to the beta-adrenergic agonist, terbutaline and 12-O-tetradecanoylphorbol 13-acetate (TPA) were significantly decreased in the presence of substance P. Inhibitory effects of substance P were noted following a 1 h exposure of primary cultures of Type II cells in vitro and persisted up to 3 h in the presence of the secretagogues, TPA and terbutaline. The IC50 values for substance P inhibition of [3H]PC release were 10 microM for basal release, 40 microM for TPA-induced release and 50 microM for terbutaline-induced release. The related neuropeptide, physalaemin and the stable active analog of substance P, [pGlu5, MePhe8, MeGly9]substance P [5-11], had no significant inhibitory effects on surfactant release whether in the presence or absence of TPA or terbutaline. These data support the hypothesis that NH2-terminal basic groups of substance P are necessary for inhibition of surfactant secretion from isolated Type II cells and support the concept that an inhibitory system contributes to mediation of surfactant secretion from Type II epithelial cells.