Cell populations dissociated from fetal rabbit lungs were analyzed by laser flow cytometry for the presence of type II pneumocytes. These cells are distinguishable by the staining of their lamellar bodies with the fluorescent lipophilic dye, phosphine-3R and by their intensity of low-angle light scatter. Lung cells were obtained by enzymatic dissociation from fetal rabbits at gestational ages of 24 d, 27 d, and from 2-d newborn rabbits. Flow cytometric analysis was sufficiently sensitive to discriminate between fetuses. Quantitative analysis of type II pneumocytes showed that newborn rabbits had a distinct cell subpopulation in a region of low-angle light scatter and phosphine-3R fluorescence intensity similar to that previously reported on type II cells from adult rabbits. By contrast, 24-d gestation rabbits had a negligible type II cell subpopulation. Fetuses of 27 and 30 d gestation showed a slow but progressive increase in the numbers of cells in the type II region. Mathematical analyses of light scatter and fluorescence intensity distributions were used to define statistically significant (P less than .05) boundaries that characterize the development of the type II cell subpopulation in fetal rabbit lung. The methods employed offer new possibilities for quantification of developing lung cell subpopulations of particular interest to the problem of respiratory distress syndrome in human neonates.