Production of insulin-like growth factor I/somatomedin C (IGF-I) by 19-day-gestation fetal rat lung fibroblasts was studied, and a paracrine (local production and action) mitogenic activity of this growth factor was explored. Specific IGF-I mRNAs were demonstrated in these cells, consistent with production of IGF-I. Using an IGF-I monoclonal antibody, IGF-I-like material was isolated from fetal lung fibroblast conditioned medium (FCM) and separated by molecular weight. Several molecular weight species were identified, including an 8,000 to 10,000 molecular weight species, a weight similar to purified IGF-I. IGF-I binding proteins elaborated by these cells were also demonstrated. The possibility of a paracrine mitogenic activity of the fetal lung fibroblast-produced IGF-I in cultures was suggested by demonstrating a reduction in DNA synthesis in cultures incubated with either the IGF-I monoclonal antibody or an IGF-I receptor antibody. These findings indicate that 19-day-gestation fetal rat lung fibroblasts produce IGF-I that acts in a paracrine fashion and suggest that this growth factor is biologically active during fetal lung development.