Telomerase expression and activity were examined in the developing lung and in the adult lung during repair after injury. Both whole lung tissue and primary cultures of type 2 alveolar epithelial cells (AEC2) isolated from fetal and adult rodents were analyzed for1) telomerase expression by immunohistochemistry and2) telomerase activity with a telomerase repeat amplification protocol. We found that telomerase was expressed in a temporally regulated manner in fetal lung through the late stages of gestation, with peak expression just before birth. Expression persisted for a brief period in neonates, then decreased to nearly undetectable levels by postnatal day 9. Telomerase expression and activity were reinduced in normally quiescent adult lung by in vivo treatment with hyperoxia. In populations of AEC2 isolated from both developing and repairing lungs, telomerase expression and activity showed a strong correlation with the proliferation marker proliferating cell nuclear antigen. It has been suggested that telomerase expression and activity are hallmarks of stem or progenitor cells. Our observations suggest that a telomerase-positive subpopulation is present within the general AEC2 population. Telomerase may act as a marker for the proliferative status of this subpopulation.