The alveolar type I epithelial cell forms the major cellular surface (ϳ70 m 2 , human) for gas exchange in the mammalian lung. Despite this important function, very little is known about its molecular phenotype or regulation of expression of its cell-specific genes (1). We have recently cloned, sequenced, and characterized a gene, T1␣, that we believe is the first definitive marker for this cell type in the adult rat lung (2, 3). The gene encodes an apical transmembrane protein that is expressed by type I cells but not by adjacent alveolar epithelial type II cells.Characterizing the regulation of this new marker for the type I cell phenotype is likely to be important for understanding the general processes by which type I cells differ in gene regulation, structure, and biology from other lung epithelial cells, particularly alveolar type II cells.Expression of T1␣ is developmentally regulated (2, 3). Both mRNA and protein are expressed in many fore-and midgut derivatives as early as embryonic day 10.5 (rat) including the primitive lung (day 12.5) and the anterior pituitary anlage (Rathke's pouch), in the early embryonic brain, spinal cord, other neural structures, and several other organs. In most of these tissues, however, expression is rapidly repressed during fetal development (brain) or postnatally (bronchiolar epithelium). In the adult rat, T1␣ mRNA and protein expression can be detected at high levels only in the alveolar type I cell, in choroid plexus epithelium, in ciliary body of the eye, and in a subset of osteoblasts (4, 5). These complex developmental temporal-spatial patterns suggest that active mechanisms of gene regulation determine the highly specific pattern of T1␣ expression in the adult.In situ hybridization, immunocytochemical, biochemical, and molecular analyses (2, 6) show that adult alveolar type II cells do not express T1␣ in vivo, although these cells reside in the alveolar epithelium and act as stem cells to generate new type I cells in normal and injured lung (7). However, when type II cells from normal lung are cultured under conditions where they do not proliferate, they rapidly (within Ͻ24 h) express both T1␣ mRNA and protein, while down-regulating type II cell genes (8).These and other similar findings suggest that type II and type I cell genes share certain common regulatory elements and transactivating molecules but not others, allowing for expression of their cell-specific phenotypes. There is now considerable information about the regulation of type II cell genes because of an interest in defining the molecular control of synthesis of pulmonary surfactant, a complex lipid-protein material secreted by type II cells. The promoters for surfactant protein (SP) 1 -A (9 -12), -B (13-17), -C (18, 19), -D (20), and Clara cell-specific protein (CCSP) (21-24) genes have been partially characterized, and some cis-regulatory elements and transactivating proteins have been identified. Most of these genes have in common their transactivation by 14,