Effects of hyperoxia in an organotypic model consisting of well-differentiated fetal rat type 2 pneumocytes have been studied by light and electron microscopy. In cultures exposed to 50% oxygen for 48 h, hyperoxia caused necrosis of cultured lung cells derived from 18- to 19-day gestation fetal rats, less damage in cells derived from 20- to 21-day gestation fetal rats, and no detectable damage of cells derived from newborn rats. After exposure to hyperoxia in organotypic cultures cocultured with fibroblast monolayers, ultrastructural abnormalities of surfactant (large lamellar bodies with disordered lamellae and abnormal shape) were detected in cells from 18- to 19-day gestation fetuses. These abnormalities were not noted when fibroblast monolayers were absent. Fibroblast conditioned medium from fibroblasts exposed to hyperoxia did not cause significant surfactant abnormalities at the ultrastructural level. These changes were less marked in cultures incubated with glutathione's constituent amino acids and with ascorbic acid during exposure to hyperoxia, and in cultures pretreated with dexamethasone (20 nM) before exposure to hyperoxia.