The ability to quantify pulmonary diffusing capacity and perfusion using dynamic hyperpolarized 129 Xe NMR spectroscopy is demonstrated. A model of alveolar gas exchange was developed, which, in conjunction with 129 Xe NMR, enables quantification of average alveolar wall thickness, pulmonary perfusion, capillary diffusion length, and mean transit time. The technique was employed to compare a group of naïve rats (n ؍ 10) with a group of rats with acute inflammatory lung injury (n ؍ 10), caused by instillation of lipopolysaccaride (LPS). The measured structural and perfusion-related parameters were in agreement with reported values from studies using non-NMR methods. Significant differences between the groups were found in total diffusion length (control 8.5 ؎ 0.5 m, LPS 9.9 ؎ 0.6 m, P < 0.001), in capillary diffusion length (control 2.9 ؎ 0.4 m, LPS 3.9 ؎ 1.0 m, P < 0.05), and in pulmonary hematocrit (control 0.55 ؎ 0.06, LPS 0.43 ؎ 0.08, P < 0.01), whereas no differences were observed in alveolar wall thickness, pulmonary perfusion, and mean transit time. These results demonstrate the ability of the method to distinguish two main aspects of lung function, namely, diffusing capacity and pulmonary perfusion. Key words: hyperpolarized gas NMR; xenon-129; lung function; diffusing capacity; pulmonary perfusion Gas transfer from ambient air to the blood involves different transport mechanisms. Alveolar ventilation is accomplished by convective transport. Gas transfer within the alveolus and from the alveolus into the blood stream occurs by diffusion along concentration gradients. The blood is then transported from the lungs to peripheral tissues by the pulmonary circulation. These transport processes are affected by a number of lung diseases. Convective transport in the airways is impaired in obstructive lung diseases (1). Diffusion impairment occurs in interstitial lung diseases as well as in pulmonary edema (2). The pulmonary vasculature is affected by both primary lung disease and by left heart failure, causing abnormalities in blood flow (3).The most common method of assessment of diffusion in the alveolar-capillary unit is measurement of the diffusing capacity for carbon monoxide, DL CO (4). The diffusing capacity is defined as the total rate of gas passage across the alveolar-capillary membrane per unit of partial pressure difference of the gas. The tracer gas carbon monoxide diffuses across the alveolar-capillary barrier and is tightly bound to hemoglobin in the erythrocytes. In addition to factors determining diffusion, e.g., the available surface area and the diffusion path length, DL CO therefore depends also on the availability of binding sites, i.e., on hemoglobin concentration and on perfusion. DL CO provides information about diffusion properties of the lung as a whole, but no regional information about function is obtained. By measurement at different partial pressures for oxygen, DL CO can be subdivided into the membrane conductance and a term reflecting the availability of binding sites. This is...