Hydrolytic enzymes are major constituents of alveolar macrophages, which in recent years have been shown to be involved in many aspects of the inflammatory response in addition to their better-known role in bactericidal processes. This review summarizes the general properties, physiologic function, cellular physiology, and clinical associations of four important hydrolytic enzymes of alveolar macrophages--lysozyme, elastase, plasminogen activator, and collagenase--with particular attention to the relationship of these enzymes to the pathophysiology of lung disease. The information reviewed shows that much is known about the biochemistry of these enzymes, that each is produced in greater quantity when alveolar macrophages are stimulated, that each has a distinctive physiologic role in the inflammatory process, and that they function as part of the overall pulmonary antibacterial defense system. Studies of the pathophysiologic effects consequent to the elaboration of excess quantities of these enzymes by stimulated macrophages show that some hydrolytic enzymes injure the lung by attacking normal as well as inflammatory tissue sites that are susceptible to degradation. Such damage is normally limited by enzymatic inhibitors, like alpha-antitrypsin, but the inactivating capacity of the inhibitors can be overwhelmed and in these instances excess enzyme contributes to the development of emphysema. This newer understanding of the pathophysiologic role of hydrolytic enzymes may lead to therapeutically beneficial methods for modulating the pulmonary inflammatory response.