The effect of exposure to oxygen on lung metabolism of prostaglandin E2 to 15-keto-prostaglandin E2 and 13-14-dihydro-15-keto-prostaglandin E2 was studied in the isolated, perfused rat lung. During a 30-sec period, lungs were infused with varying concentrations of prostaglandin E2 labeled with hydrogen-3 and the fraction metabolized during one passage was determined. At a prostaglandin E2 concentration of 5 nM, which approximates that in normal mixed venous blood, an average of 93 per cent of infused prostaglandin was metabolized by normal lungs. At prostaglandin E2 concentrations of 2 to 70 micrometer, the fraction metabolized decreased. The computed concentration of prostaglandin E2 for half-maximal rate of metabolism was 4.2 micrometer. Metabolism of prostaglandin E2 by isolated lungs was unaffected by exposure of rats to greater than 97 per cent oxygen at 1 atmosphere absolute for 24 hours, but was markedly depressed after both 36 and 48 hours of hyperoxia. These results indicate that exposure of the rat to oxygen for 36 and 48 hours is associated with decreased ability of the lung to metabolize prostaglandin E2 to its keto derivatives and may result in increased concentration of prostaglandin E2 in the systemic arterial blood.