The present experiments were designed to investigate the presence of insulin receptors on isolated adult rat alveolar type II epithelial cells and to study the effect of insulin on glucose transport and ion transport in alveolar type II cell monolayers. Alveolar type II cells in primary culture possess high affinity insulin binding sites, which share biochemical and immunologic similarities with insulin receptors previously identified on other cell types. Competition curves demonstrated half-maximal inhibition of 125I-porcine insulin binding at an unlabeled insulin concentration of 4 ng/ml. Scatchard plots of the binding data were concave upward, as has been reported for insulin binding to other cell types, and were used to calculate that alveolar type II cells contained 17,000 insulin receptor sites per cell. Glucose transport was determined by measurement of initial rates of 2-deoxy-D-glucose uptake. Insulin-stimulated 2-deoxy-D-glucose transport [67.8 +/- 15.7% (mean +/- SE), n = 5, P less than 0.01] with a half-maximally effective insulin concentration of 1.2 +/- 0.6 ng/ml, which is in the physiological range of rat serum insulin concentrations. Insulin effects on the electrical properties of the alveolar type II cell monolayers maintained on collagen-coated Millipore filters were tested in Ussing-type chambers. Insulin increased the potential difference (PD) by 44 +/- 10% (n = 5, P less than 0.01) and short-circuit current (Isc) by 50 +/- 13% (n = 5, P less than 0.01) when it was added to the basolateral side but produced little effect when it was added to the apical side.(ABSTRACT TRUNCATED AT 250 WORDS)