Human pulmonary surfactant proteolipid of Mr = 5,000, now termed surfactant protein C (SP-C), is produced by proteolytic processing of an Mr = 22,000 precursor. The active hydrophobic peptide imparts surface active properties to pulmonary surfactant phospholipids. We have determined the entire nucleotide sequence of two distinct genes encoding SP-C from a genomic library prepared from human leukocytes. SP-C genes were encoded by approximately 3.0 kilobase pairs of DNA containing six exons and five introns. In both genes, the active hydrophobic region of the polypeptide was located in the second exon that encodes a peptide of 53 amino acids. The entire nucleotide sequences of the two classes of SP-C genes differed by only 1%. Two cDNAs encoding SP-C were distinguished on the basis of an 18-nucleotide deletion at the beginning of the fifth exon; no such deletion was detected within the two classes of SP-C genes. Comparison of the 3'-untranslated regions of SP-C cDNA clones and the two classes of genomic clones demonstrated that cDNAs with and without the 18-base pair deletion could be derived from both of the genes. This 18-base pair deletion occurs in nucleotide sequences compatible with two distinct RNA splice sites. One additional cDNA clone showed the addition of an 8-base pair insert at the end of exon 5, which was also compatible with two distinct splice sites. Both classes of SP-C genes were represented by cDNAs, demonstrating that both classes of genes are actively transcribed. The two SP-C genes were readily distinguished on the basis of their nucleotide sequences and restriction fragment analyses of their flanking DNA. Two distinct classes of human SP-C genes are transcribed, and the heterogeneity in the SP-C RNAs appears to result from differential splicing.