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Formalin-fixed paraffin-embedded tumor tissues from North American (N = 12) and Japanese (N = 11) patients with lung carcinomas were stained by the immunoperoxidase method for surfactant-specific apoprotein. Cytoplasmic and focal nuclear staining was seen in three "bronchioloalveolar carcinomas" occurring in Japanese patients. We refer to these three tumors as carcinomas of Type II pneumocytes. These neoplasms formed discrete masses with minimal growth along the alveolar septa at margins of the tumors. Papillary growth with lymphocytic infiltrates in the stalks of the papillary processes was the usual growth pattern. Focal noncaseating granulomas were seen in the stroma of 2 cases, and similar granulomas in the draining lymph nodes were noted in 1. The abundant cytoplasm was foamy, and the nuclei were generally vacuolated with frequent eosinophilic inclusions in the vacuoles. By electron microscopy, osmiophilic lamellar bodies or whorled lamellas were seen in the cytoplasm of the 3 tumors staining for surfactant apoprotein. The nuclei in 2 of the 3 cases contained tubular inclusions; the tubules had a diameter of 60 nm and a 20-nm core.