To investigate the mechanism of thyroid hormone action on pulmonary surfactant synthesis, we characterized the effect of triiodothyronine on phosphatidylcholine synthesis in cultured fetal rabbit lung. Since glucocorticoids stimulate surfactant synthesis and reduce the incidence of Respiratory Distress Syndrome in premature infants, we also examined the interaction of triiodothyronine and dexamethasone. The rate of choline incorporation into phosphatidylcholine was determined in organ cultures of rabbit lung maintained in serum-free Waymouth's medium. In 23-d lung cultured for 72 h, the increase in choline incorporation with triiodothyronine alone, dexamethasone alone, and triiodothyronine plus dexamethasone was 50, 62, and 161%, respectively. Both triiodothyronine and dexamethasone also increased incorporation rates with glucose, glycerol, and acetate as precursors, and stimulation with triiodothyronine plus dexamethasone was at least additive. Dexamethasone, but not triiodothyronine, affected distribution of radioactivity from [3H] acetate among phospholipids. Stimulation was first detected 8-12 h after addition of triiodothyronine, and then increased in a linear fashion. With triiodothyronine plus dexamethasone, stimulation was maximal at 48-72 h, and was supra-additive at all times. Exposure of cultured lung to dexamethasone enhanced the subsequent response to triiodothyronine, but not vice versa. When triiodothyronine was removed from cultures, there was no further stimulation and the triiodothyronine effect was partially reversed within 24 h. Half-maximal stimulation of choline incorporation occurred at a triiodothyronine concentration (0.10 nM) very similar to the dissociation constant for triiodothyronine binding to nuclear receptor (0.11 nM). The relative potencies of thyroid hormone analogs for nuclear binding and stimulation of phosphatidylcholine synthesis were also similar: triiodothyroacetic acid greater than triiodothyronine-proprionic acid greater than L-triiodothyronine approximately D-triiodothyronine much greater than thyroxine much greater than 3,5-diethyl-3'-isopropyl-DL-thyronine approximately 3,5-dimethyl-3'-isopropyl-L-thyronine approximately reverse triiodothyronine. The effect of triiodothyronine was blocked by the presence of either actinomycin D or cycloheximide, inhibitors of ribonucleic acid and protein synthesis, respectively. We conclude that triiodothyronine stimulates phosphatidylcholine synthesis by a process involving nuclear receptors and de novo ribonucleic acid and protein synthesis. These findings support the concept that endogenous triiodothyronine has a physiologic role in lung maturation and suggest that a combined antenatal therapy with thyroid hormone and glucocorticoid may be useful for prevention of Respiratory Distress Syndrome in the premature infant.