Interleukin-4 (IL-4) is a pleotrophic cytokine which is increased during lung injury and inflammation. Epithelial cell morphology and surfactant homeostasis were assessed in 4–52-wk-old transgenic mice in which IL-4 was expressed in the bronchial and bronchiolar epithelial cells under the control of the Clara cell secretory protein promoter (CCSP-IL-4 mice). IL-4 caused progressive pulmonary infiltration with macrophages, lymphocytes, neutrophils, and eosinophils. Epithelial cell hypertrophy and mucus cell metaplasia were observed in the lungs of CCSP-IL-4 mice at all ages. Airway epithelial cells contained increased neutral glycoproteins and expressed gastric mucin, normally absent in the bronchiolar epithelium of the mouse. Immunohistochemical and biochemical studies demonstrated increased surfactant proteins A and B in lung sections and lung homogenates of CCSP-IL-4 transgenic mice. Increased immunostaining for surfactant proprotein C was also detected in type II epithelial cells of the transgenic mice. In contrast, surfactant protein B and CCSP expression was decreased or was absent in hypertrophic epithelial cells lining the conducting airways of transgenic mice. Lung-specific increase in T-cell proliferative responses to mitogenic stimulation and antibody secretion were detected in CCSP-IL-4 mice. Differentiated characteristics of respiratory epithelial cells were dramatically influenced by the chronic production of IL-4 in the conducting airways. Alterations in lung morphology in the CCSP-IL-4 mice are similar to some of those induced by antigenic stimulation or associated with chronic airway inflammation.