Hypothyroid adult rats were injected intravenously with [3, 5, 3'-125I]triiodothyronine (T3) or [125I]thyroxine (T4). Others were similarly treated except for the addition of a 500-fold excess of the appropriate unlabeled hormone. Light microscopic autoradiography of semithin sections of lung from these animals demonstrated labeling localized over alveolar parenchymal tissue. Analysis of the labeling studies of type II cells revealed high affinity, low capacity binding of T3 and, to a much lesser extent, T4 to both the nuclear and cytoplasmic compartments. Adult lung in organ culture was also treated with 125I-T3 or 125I-T4 and electron microscopic autoradiography performed. These studies revealed that, when expressed as grains per square micrometer, there was substantially more labeling over the lamellar inclusion bodies and the mitochondria than over the nucleus. The results of this study provide morphologic evidence of specific uptake and binding of thyroid hormones by the nucleus and cytoplasm of alveolar type II cells, and suggest that the lamellar inclusion bodies and mitochondria may be the primary location of the cytoplasmic binding. These findings also substantiate the view of a direct effect of thyroid hormones on the lung and, in particular, on the type II alveolar cells.