Pulmonary surfactant is a lipoprotein complex that functions to reduce surface tension at the air liquid interface in the alveolus of the mature lung. In late gestation glycogen-laden type II cells shift their metabolic program toward the synthesis of surfactant, of which phosphatidylcholine (PC) is by far the most abundant lipid. To investigate the cellular site of surfactant PC synthesis in these cells we determined the subcellular localization of two key enzymes for PC biosynthesis, fatty acid synthase (FAS) and CTP:phosphocholine cytidylyltransferase-␣ (CCT-␣), and compared their localization with that of surfactant storage organelles, the lamellar bodies (LBs), and surfactant proteins (SPs) in fetal mouse lung. Ultrastructural analysis showed that immature and mature LBs were present within the glycogen pools of fetal type II cells. Multivesicular bodies were noted only in the cytoplasm. Immunogold electron microscopy (EM) revealed that the glycogen pools were the prominent cellular sites for FAS and CCT-␣. Energy-filtering EM demonstrated that CCT-␣ bound to phosphorus-rich (phospholipid) structures in the glycogen. SP-B and SP-C, but not SP-A, localized predominantly to the glycogen stores. Collectively, these data suggest that the glycogen stores in fetal type II cells are a cellular site for surfactant PC synthesis and LB formation/maturation consistent with the idea that the glycogen is a unique substrate for surfactant lipids.CTP:phosphocholine cytidylyltransferase; pulmonary surfactant; immunogold; fatty acid synthase SHORTLY BEFORE BIRTH, alveolar type II cells must increase their surfactant lipid and protein synthesis to generate sufficient pulmonary surfactant. This material reduces the surface tension at the air/liquid interface and ample amounts are required to prepare the lung for extrauterine life (30). Surfactant production appears to be a carefully timed event because a preterm infant can experience respiratory distress and atelectasis as a direct result of pulmonary surfactant insufficiency.Pulmonary surfactant is composed of a mixture of lipids and proteins. The most abundant lipid species is phosphatidylcholine (PC) with dipalmitoyl-PC being the surface-active reagent (17). Whereas alveolar type II cells in the postpartum lung need to synthesize lipids and proteins for pulmonary surfactant maintenance, the fetal type II cells need to generate enough material to establish a functioning air-liquid barrier immediately at birth (10, 29). It is evident that the surge of production of surfactant at late fetal gestation is a daunting metabolic task for the type II cells. Morphologically, large amounts of glycogen accumulate in the distal undifferentiated epithelium before surfactant synthesis, and these glycogen stores are depleted as surfactant is synthesized (6, 32). Biochemically, temporal relationships between glycogen and phospholipids (5, 7) have suggested that glycogen is used as a carbon source to generate the glycerol backbone and acyl chains of the surfactant lipids, but a direct precu...