After 24 h exposure to 0.1 mM oleate or 0.1 mM palmitate there was a 2- and 1.7-fold increase, respectively, in the incorporation of choline into the lipids of type II pneumocytes. Palmitate increased the labeling of disaturated phosphatidylcholine (PC) from 23.0% of total labeled PC in control cultures to 56.6% and oleate decreased labeling of disaturated PC to 9.4%. The percentage of total cellular radioactivity found in the lipid fraction was also markedly higher in the fatty acid-treated cells (83.3% for oleate and 78.7% for palmitate) than in control cultures (64.0%). Radioactivity in water-soluble choline metabolites was correspondingly lower, with phosphocholine representing more than 95% of the label in both control and experimental cultures. After a 3 h pulse-chase period, oleate and palmitate significantly increased the percentage of total cellular radioactivity in PC and decreased the percentage in phosphocholine. Similar results were obtained by adding melittin (1-2 micrograms/ml) or phospholipase C (0.05 U/ml) to the culture medium. The stimulation of PC synthesis by fatty acids was demonstrated as early as 1 h after exposure to oleate or palmitate and at all concentrations from 0.025 to 0.25 mM. Cytidylyltransferase activity in total cell homogenates was also enhanced by long-term exposure to fatty acids and short-term addition of fatty acids or phospholipase C and melittin to the culture medium. A similar increase in cytidylyltransferase activity was found in the 100 000 X g particulate fraction of type II cells exposed to fatty acids, whereas no differences were found between the cytosolic fractions of control and treated cells. These results support the concept that an increase in intracellular level of fatty acids either from an exogenous source or following the activation of endogenous phospholipases regulates PC synthesis in fetal type II pneumocytes.