1. The fate of [14C]arachidonic acid perfused through the pulmonary circulation was studied in guinea-pig lungs perfused with Krebs solution. 2. Radioactivity in the lung effluent fell rapidly and by 10 min about 20% of the infused radioactivity had emerged. 3. Most (70%) of the effluent radioactivity was associated with products of cyclo-oxygenase activity, whereas in the lung tissue most of the retained radioactivity was present as phospholipid. 4. Radioactivity in phospholipid was distributed equally between three groups: phosphatidyl choline, phosphatidyl ethanolamine and the other phosphatides. 5. Addition of albumin to the Krebs solution perfusing the lung increased the proportion of effluent radioactivity to 50%, decreased the cyclo-oxygenase products but increased the label in phospholipid in lung. 6. Indomethacin, frusemide, bromcresol green and diethylcarbamazine all decreased biological activation of arachidonic acid. 7. Indomethacin, bromcresol green and diethylcarbamazine also decreased effluent radioactivity and cyclo-oxygenase products with minimal effects on the distribution of radioactivity in lung lipid. 8. It appears that the major metabolic pathway for exogenous arachidonic acid perfused through the pulmonary circulation was incorporation into phospholipid. Metabolism via cyclo-oxygenase only involved about 15% of the total substrate infused.