Lung maturation was examined in fetuses of rabbit does made diabetes with alloxan and then given cortisol or saline injections in late gestation. We have previously demonstrated decreased deflation stability and decreased functional surfactant by surface balance without change in lung lavage lecithin-to-sphingomyelin ratio (L/S) or disaturated phosphatidylcholine content (DSPC) in offspring of alloxan rabbits. Pressure-volume curves of fetuses of alloxan rabbits treated with cortisol demonstrated deflation stability intermediate between alloxan and control fetuses. Functional assessment of pulmonary lavage surfactant determined by surface balance was increased to control levels in fetuses of alloxan-cortisol does. There were no changes in DSPC content or L/S in lung lavage among fetuses from control does, those treated with alloxan, or those treated with alloxan than cortisol during late gestation. These findings suggest that maternal cortisol administration in the alloxan diabetic rabbit model produces a specific reversal of the functional delay of lung maturation caused by alloxan diabetes.