The exogenous surfactant, Curosurf, contains proteins as well as phospholipids. We investigated the possibility that these might affect the reutilization of exogenous phospholipid by type II alveolar cells isolated from rat lung. The time course of incorporation into lamellar bodies of radioactivity from tritiated dipalmitoyl-phosphatidylcholine (DPPC) contained within liposomes was studied. Rates of uptake were compared between liposomes prepared from pure phospholipids and from Curosurf. The incorporation of labelled choline into newly synthesized phosphatidylcholine was also determined in the presence of both preparations. The rate of DPPC incorporation over the first 4 h was the same, but, after 6 and 8 h, the radioactivity associated with lamellar bodies was about 40% higher from Curosurf liposomes. By contrast, both Curosurf and the phospholipid mixture enhanced choline incorporation into phosphatidylcholine to the same extent. We conclude that Curosurf enhances the surfactant-related phosphatidylcholine content of type II cells by two mechanisms, one of which depends on the presence of proteins in exogenous surfactant. The difference in incorporation of radioactivity from liposome-associated labelled dipalmitoyl-phosphatidylcholine cannot be explained just by an increase in reutilization of choline from degraded dipalmitoyl-phosphatidylcholine.