1. The properties of the rat alveolar lining film have been studied by observing the behaviour in a hanging drop, under reduced or increased ambient pressure, of bubbles derived from the lung.2. When such a bubble, covered by a metastable film of surfactant, is made to shrink, the material displaced from the surface usually remains in a form in which it can be re-adsorbed to the surface and retains its surpellic properties.3. When an excess of surfactant is available for adsorption to the surface of such a bubble in water, an increase in area to about 1.25 (varphi) times the metastable area is both necessary and sufficient for additional adsorption to the surface to take place.4. No significant variation of the ratio varphi with temperature between 22 and 37 degrees C has been found.5. It is concluded that during quiet breathing (involving a twofold change in lung volume in the rat) the variation in alveolar surface area is less than 25%. This finding is compatible with the extant morphometric data, but not with any assumption that the surface area is proportional to the 2/3 power of the gas volume.6. The behaviour of the bubbles in blood serum is similar to that in water. In a 2% solution of the detergent Tween 80, further adsorption of surfactant to the bubble surface does not take place.7. The fact that bubbles obtained from the lung by instillation of a solution of Tween 80 have surfactant linings similar to those of bubbles obtained with water or saline demonstrates that the bubble lining layer consists of the original alveolar lining layer detached.8. When a metastable bubble is stretched, it sometimes behaves as if some or all of its surfactant had been lost from the surface. The causes of this are unknown.9. The amount of surfactant associated with metastable bubbles freshly squeezed from a fragment of lung varies from bubble to bubble; the amounts found have ranged from 1 to 4.5 times (mean, 2) that required to cover the original bubble area with a metastable film. This would be compatible with an alveolar lining film of very uneven thickness.10. The maximum surface tension reached in the early stages of expansion of a lung bubble from the metastable state is about 34 mN/m.