Interferon production in rat type-II pneumocytes and alveolar macrophages in response to viral stimulation was examined. Type-II pneumocytes and alveolar macrophages isolated from the lungs of male Sprague-Dawley-rats were inoculated with Ao/PR/8/34 influenza and parainfluenza viruses at virus to cell ratios of 1.0 to 10. They were monitored for interferon production for 48 hours. The products were examined for antiviral activity toward Sendai or influenza viruses, nonsedimentation behavior, protein nature, stability at pH 2.0 and 56 degrees-C, nondissolution, and sensitivity of the DNA synthesis phase to actinomycin-D, to ensure that they were interferons. Similar experiments were conducted in which the cultures were primed with small amounts of rat interferon. Interferons isolated from the the two cell types were tested against the viruses using rat fibroblast lung cells, guinea-pig, mouse, human, and monkey cell lines as the hosts, to determine the host ranges for antiviral activity. Both viruses induced dose dependent increases in cytokines of both cell types, with maximal induction occurring at 16 to 20 hours. Maximum cytokine induction by type-II pneumocytes was three to four times higher than that of alveolar macrophages. The cytokines induced by both cell types exhibited characteristics associated with alpha and beta interferons. The cytokines were produced more rapidly and in larger quantity by macrophage and type-II cell cultures that had been primed. The interferons that showed the strongest antiviral activity of rat derived cell line interferons was seen in the guinea-pigs (50 percent) followed by mouse cells (40 percent). No antiviral activity was observed in human and monkey cell cultures. The authors conclude that rat type-II pneumocytes are active producers of interferon in response to a viral inducer. Type-II cells could be a major source of alveolar interferon for activating the antiviral state, activating and enhancing phagocytosis, and modulating immune mechanisms and associated alveolar cell functions needed for maintaining lung integrity.