C hronic hypoxic lung diseases are associated with abnormal blood pressure regulation. Because the lung is the principal site of angiotensin conversion and because hypoxia decreases converting enzyme activity, we examined whether angiotensin converting enzyme activity was impaired in lung disease. 12 dogs received a 6 wk course of aerosolized and intratracheal papain that produced moderate panlobular emphysema. These dogs and 24 control dogs were anesthetized and sampling catheters were placed under fluoroscopic control. Angiotensin conversion was measured by a blood pressure response bioassay. Pulmonary converting enzyme activity was also assessed by infusing bradykinin (BK) and using radioimmunoassay to measure the instantaneous clearance of BK and the concentration of BK in the pulmonary artery which first produced spillover of BK into left atrial blood. Angiotensin conversion was reduced in the emphysematous dogs to 81.1% (13.2 SD) from 92% (6 SD) in the control dogs (P < 0.01). Instantaneous clearance of BK in the emphysematous dogs was only slightly reduced (93%), despite reduction in their Pao₂ to 75 mm Hg, indicating that the greatest proportion of the perfused vascular bed was exposed to alveolar Po₂ of >90 mm Hg. However, the barrier to BK passage provided by the lung, and measured by the spillover level, was reduced ¼ to ½ that observed in control animals. That the defect was promptly corrected by supplemental oxygen indicates that regional pulmonary vascular converting enzyme activity had been impaired by regional alveolar hypoxia, which permitted some peptide to pass through the lungs unmetabolized. Determination of peptide metabolism in the lungs may provide a useful measure of regional alveolar hypoxia and may lead to new ways of assessing lung injury.