Pulmonary nonciliated bronchiolar epithelial cells (Clara cells) and alveolar type II (AT II)During the respiratory cycles, the pulmonary surfactant protects the lung from collapse by lowering the air-liquid interface tension. Pulmonary surfactant is composed of 90 -95% lipids and 5-10% surfactant proteins that are synthesized, stored, and secreted by alveolar type II (AT II) 1 epithelial cells and nonciliated bronchiolar epithelial cells (Clara cells). Similar to the liver, the lung is an organ with a high lipid turnover rate to fulfill the need for surfactant synthesis. The majority of surfactant lipids are phospholipids (ϳ80%). Disaturated phosphatidylcholine (PC), principally dipalmitoyl-PC, is the major phospholipid component in surfactant. In addition, there are about ϳ10% neutral lipids in pulmonary surfactant. Although extensive characterization of phospholipids has been performed in maintaining surfactant function and homeostasis, the functional roles of neutral lipids in the lung are less clear. It has been documented that many neutral lipid metabolites are the ligands for nuclear receptors that are potent transcription factors controlling gene regulation.In neutral lipids, cholesteryl ester and triglycerides can be hydrolyzed by lysosomal acid lipase in the lysosome of cells to generate free cholesterol and free fatty acids (1). Free cholesterol and free fatty acid derivative compounds, hydroxyeicosatetraenoic acids, hydroxyoctadecanoic acids (HODEs), and 15-deoxy-⌬ 12,14 -prostaglandin J 2 (15d-PGJ 2 ), are ligands for peroxisome proliferator-activated receptor ␥ (PPAR␥). PPAR␥ belongs to the nuclear receptor superfamily. PPAP␥ is involved in a broad range of physiological functions, including macrophage inflammatory responses (2, 3), adipocyte differentiation (4 -6), glucose homeostasis (7), and apoptosis (8). Upon binding to ligands, PPAR␥ interacts with the retinoid X receptor (RXR) to form the PPAR␥⅐RXR dimer that subsequently binds to specific PPAR-responsive elements (PPRE) on target genes and recruits nuclear receptor coactivators. Nuclear receptor coactivators possess intrinsic histone acetyltransferase activities to activate gene expression. PPAR␥ functions as both a positive and a negative regulator for target genes. Since AT II epithelial cells are responsible for synthesizing surfactant and highly lipogenic, it is important to know how gene expression of surfactant proteins in these cells is regulated by neutral lipid metabolic pathways.Among the surfactant proteins, SP-B is a 79-amino acid amphipathic peptide that is synthesized and produced in Clara cells and AT II epithelial cells. SP-B is secreted from AT II epithelial cells along with phospholipids into the alveolar lumen to form the surfactant. SP-B facilitates lamellar body formation in AT II epithelial cells and phospholipid spreading during the respiratory cycles (9). Null mutations in the SP-B gene cause lethal respiratory distress in newborn infants and in SP-B-deficient mice produced by gene targeting (10, 11). Therefore, SP-B...