Edges of excised lungs from twenty 27-day-old rabbit fetuses were photographed as tracheal pressure was raised and air entered alveoli. Lungs from two littermates were expanded simultaneously with pressure up to 50 cmH2O. The effect of surfactant (SA) on peripheal airway expansion was assessed by depositing 25 mul of SA suspension in the trachea of one pair of lungs. The suspension was obtained by washing the lungs of young adult rabbits and concentrating the SA by centrifugation. In 9 of the 10 experiments, the SA-treated lung was the first to become expanded. When pressure was lowered to 10 or 0 cmH2O, peripheral airways of treated lungs usually maintained expansion; air in control lung alveoli disappeared, or was trapped. High surface tension tended to collapse the cylindrical respiratory bronchiole rather than the spherical alveolus, causing air trapping, if the radius of the cylinder was less than half of the sphere. SA lessened collapsing tendency in the respiratory bronchiole.