Fetal rabbit lung explants were incubated with 3.0 mM glucose and varying levels of lactate. An increase in lactate concentrations resulted in a decrease in glucose incorporation into total disaturated phosphatidylcholine. Glucose utilization for surfactant phosphatidylcholine synthesis was also reduced by approximately 35% in the presence of 5.0 mM lactate. The decreased incorporation of glucose occurred in the fatty acid portion of both total tissue disaturated phosphatidylcholine and surfactant phosphatidylcholine. The effect of lactate on glucose incorporation into pulmonary phospholipids was not affected by the presence of pyruvate in concentrations up to 500 microM. Pyruvate alone produced only a slight decrease in glucose utilization for lung phospholipid production. These data indicate that glucose and lactate are competitive substrates for late gestation surfactant phospholipid fatty acid synthesis, and that lactate is potentially a very important substrate for fetal lung development.