Alterations in type II pneumocyte function, including surfactant biosynthesis, may play a significant role in the development and pathophysiology of oxidant-induced lung injury. The results of this study showed that type II cells exposed to 50-300 μM H2O2 demonstrated a dose-dependent decrease in phosphatidylcholine (PC) synthesis with only minimal changes in cell viability. The activities of the choline-phosphate cytidyltransferase and cholinephosphotransferase, specific enzymes of PC synthesis, were not significantly decreased by the exposure. However, the activity of glycerol-3-phosphate acyltransferase, a sulfhydryl-dependent enzyme involved in an early stage of phospholipid synthesis, was decreased by the exposures in a manner that was similar to that seen for PC synthesis. Further studies showed that incubation of type II cells with polyethylene glycol-conjugated catalase for 1 h resulted in an increase in the cell-associated catalase activity (53 ± 5 vs. 6.7 ± 1.5 units/mg protein for controls). Confocal microscopy analysis showed that a significant portion of this activity was located intracellularly. More importantly, these cells were protected from changes in PC synthesis rates when subsequently incubated with 300 μM H2O2. These results indicate that the deleterious effects of H2O2 on type II cell surfactant synthesis may be pharmacologically modified in vitro, a concept that may have utility with regard to the modulation of in vivo lung injuries.