There is some evidence that lung surfactant (LS) might have some immunomodulatory functions. One of these is modulation of macrophage function. Therefore, we studied the effect of LS on lipopolysaccharide (LPS)-induced nitric oxide (NO) production by alveolar macrophages (AM). Incubation of AM with LPS (22 hr) in vitro leads to formation of large amounts of NO. However, addition of LS produced a dose-dependent decrease in NO formation. NO production was reduced by approximately 80% at LS levels of 200 mg phospholipld/ml. The enzyme responsible for LPS-induced NO production is inducible nitric oxide synthase (iNOS). AM stimulated with LPS expressed iNOS mRNA, but LS did not inhibit the mRNA expression. However, iNOS protein levels, as detected by Western blotting, were decreased by approximately 80%. These results demonstrate that LS inhibits LPS-induced NO formation by decreasing iNOS protein levels in AM. Furthermore, the results suggest that LS does not interfere with initial LPS-induced signaling events, but it acts at the translational or post-translatlonal level. This indicates that LS is delivering a signal to the interior of the cell. Therefore, the effect of LS on NO production might be useful to delineate the signal transduction events induced by LS in AM.