Lung development is associated with a surge in surfactant phosphatidylcholine (PC) production to prepare the newborn for extrauterine breathing. This process is associated with a marked increase in the activity of the rate- regulatory surfactant enzyme, CTP:phosphocholine cytidylyltransferase (CCT). To investigate the molecular basis for developmental activation of CCT, we analyzed expression of endogenous CCT and a reporter gene, -galactosidase, in fetal, newborn, and adult promoter-reporter transgenic mice. Transgenics harboring ~2kB of the CCT promoter linked upstream of a -galactosidase reporter gene displayed relatively high expression in distal lung epithelia. Endogenous lung CCT and -galactosidase activities, protein content, and transcript levels displayed maximal expression within the newborn period. CCT and -galactosidase activities and enzyme levels increased with time in cultured fetal lung explants isolated from transgenics. Transfectional analysis using CCT promoter-reporter constructs in developing rat type II cells revealed that a region encompassing -169/+71 contained the DNA elements required for perinatal activation. The studies demonstrate that developmental induction of surfactant phospholipid is due, at least in part, to transcriptional activation of the CCT gene.