The mechanisms used by alveolar type I pneumocytes for maintenance of the lipid homeostasis necessary to sustain these large squamous cells are unknown. The processes may involve the ATP-binding cassette transporter A1 (ABCA1), a transport protein shown to be crucial in apolipoprotein A-I (apoA-I)-mediated mobilization of cellular cholesterol and phospholipid. Immunohistochemical data demonstrated the presence of ABCA1 in lung type I and type II cells and in cultured pneumocytes. Type II cells isolated from rat lungs and cultured for 5 days in 10% serum trans-differentiated toward cells with a type I-like phenotype which reacted with the type I cell-specific monoclonal antibody VIIIB2. Upon incubation of the type I-like pneumocytes with agents that up-regulate the ABCA1 gene [9-cis-retinoic acid (9cRA) and 22-hydroxycholesterol (22-OH, 9cRA/22-OH)], ABCA1 protein levels were enhanced to maximum levels after 8-16 h and remained elevated for 24 h. In the presence of apoA-I and 9cRA/22-OH, efflux of radioactive phospholipid and cholesterol from pneumocytes was stimulated 3 to 20-fold, respectively, over controls. Lipid efflux was inhibited by Probucol. Sucrose density gradient analysis of the media from stimulated cells incubated with apoA-I identified heterogeneous lipid particles that isolated at a density between 1.063 and 1.210 g/ml, with low or high apoA-I content. Thus, pneumocytes with markers for the type I phenotype contained functional ABCA1 protein, released lipid to apoA-I protein, and were capable of producing particles resembling nascent HDL, indicating an important role for ABCA1 in the maintenance of lung lipid homeostasis.