Cyclophosphamide, an immunosuppressive alkylating agent, has been reported to cause acute and pulmonary injury in both humans and animals. Cyclophosphamide is also a common component of multi-drug regimens that show high pulmonary toxic potential. Although mechanisms of pulmonary damage caused by cyclophosphamide or other cytotoxic agents are unknown, possibilities include direct toxicity to pulmonary tissue or indirect toxicity through activation of pulmonary inflammatory cells. We report here a model system for the study of acute effects of cyclophosphamide on pulmonary immune cells in rats. Our findings show that 16 h after 1 intraperitoneal dose of cyclophosphamide there is: (1) a dose dependent release of locally produced low molecular weight chemotactic factors for blood monocytes into bronchoalveolar lavage (BAL) fluid, (2) a pulmonary influx of immature myeloperoxidase positive macrophages in low dose cyclophosphamide treated animals, (3) an enhancement of oxidant generation by pulmonary macrophages from low dose treated animals that correlates with the presence of myeloperoxidase positive macrophages, (4) the presence of factors in BAL fluid of treated rats that modulate oxidant release by normal rat pulmonary macrophages, (5) a dose dependent reduction in the percentage of BAL lymphocytes, and (6) evidence for pulmonary injury as manifested by elevated BAL fluid albumin concentrations in low dose cyclophosphamide treated animals. These findings suggest that cyclophosphamide may induce pulmonary injury through activation of pulmonary immunocompetent cells and subsequent attraction of systemic inflammatory cells.