Fluid-filled lumina of fetal rat lungs contain lamellar bodies (LBs) as well as tubular myelin (TM), both of which are thought to be stores of phospholipid-rich pulmonary surfactant. The alveolar epithelium is believed to secrete LBs, but neither the origin nor the mechanism of TM formation is entirely certain. The main objective of this study was to determine the relationship between secreted LBs and TM and to define membrane phenomena which occur during TM formation. I examined lung tissues of 20-21 day-old fetuses (day 22 = term) using transmission and high voltage transmission electron microscopy and cytochemistry. My findings indicate that secreted LBs, identified by the presence of an acid-phosphatase reactive core, are the precursor of TM. Secreted LBs are highly organized structures which contain structurally specialized areas, one of which is a "mini-lattice" structure similar to TM. During TM formation, fuzzes or 8.0-nm diameter particles appear on transition membranes, although LB membranes appear to lack both structures. Similar particles are present on TM membranes and are generally associated with membrane intersections. My results provide evidence that TM is formed from LBs within the alveolar lumen by mechanisms which may be complex.