We have tested the hypothesis that oxidation of lung surfactant results in loss of surface tension lowering function. Porcine lung surfactant was exposed to conditions known to cause lipid peroxidation (0.2 mM FeCl2 + 0.1 mM H2O2 or 5 microM CuCl2). Lipid peroxidation was verified by detection of conjugated dienes, thiobarbituric acid reactive substances, fluorescent products, hydroxy alkenals, and loss of unsaturated fatty acids. Exposed samples had significantly diminished surface tension lowering ability in vitro as measured in a bubble surfactometer. Samples exposed to FeCl2 + H2O2 had significantly diminished surface tension lowering ability in vivo as indicated by their reduced ability to improve lung compliance of surfactant-deficient fetal rabbits. Oxidation of phospholipid mixtures with surface tension lowering activity and containing unsaturated acyl groups resulted in partial loss of activity as determined in vitro. These results suggest that the effect of oxidants on lung surfactant function is due, in part, to effects on the phospholipid components and that acute pulmonary inflammation accompanied by oxygen radical production may result in surfactant lipid peroxidation and loss of surface tension lowering function.