Both glucocorticoids and alveolar fluid distension affect the rate of fetal lung maturation, possibly representing a common cellular pathway. In an explant culture, there is a spontaneous increase in triglyceride incorporation into saturated phosphatidylcholine over time. This mechanism is stimulated by prostaglandin (PG) E2, blocked by both bumetanide and indomethacin, and overridden by exogenous PGE2. Type II cells synthesized and produced PGE2 between days 16 and 21 postconception, increasing fourfold between days 19 and 21. Fetal rat lung fibroblasts released triglyceride in response to PGE2, increasing 10- to 14-fold between days 19 and 21 postconception; phloretin (1 x 10(-5) M) completely blocked this effect of PGE2 on triglyceride release. Dexamethasone stimulated both type II cell PGE2 synthesis (threefold) and fibroblast triglyceride release in response to PGE2 (60%) by day 20 cells. Stretching type II cells also increased PGE2 synthesis (approximately 100% at 1, 2, and 3 h vs. static cultures). Recombination of [3H]triglyceride-labeled fibroblasts with type II cells in an organotypic culture resulted in progressive incorporation of label into saturated phosphatidylcholine by type II cells. This process was also blocked by the addition of indomethacin and overridden by exogenous PGE2. These data suggest that the combined effects of alveolar fluid dilatation and glucocorticoids may coordinate the timely transfer of triglyceride from fibroblasts to type II cells for augmented surfactant production through their effects on PGE2 production and action as term approaches.