Alveolar epithelial cells are among the first cells to encounter inhaled particles or organisms. These cells likely participate in the initiation and modulation of the inflammatory response by production of chemokines. However, there is little information on the extent or regulation of chemokine production by these cells. Rat type II cells were studied under differentiated and dedifferentiated conditions to determine their ability to express and secrete CXC chemokines. Both differentiated and dedifferentiated type II cells secreted MIP-2, MCP-1, and CINC-2 in response to a cytokine mixture of IL-1beta, TNF-alpha, and IFN-gamma or to IL-1beta alone. The cytokine mixture also induced iNOS expression and nitrite secretion. Both differentiated and dedifferentiated type II cells expressed CINC-1 (GRO), CINC-2alpha, CINC-3 (MIP-2), and MCP-1 mRNA, and their expression was increased by the cytokine mixture or by IL-1beta alone. However, CINC-2beta, a splice variant of CINC-2, was only expressed under differentiated conditions stimulated by KGF and was not increased by the cytokine mixture or by IL-1beta. In situ hybridization of normal lung and lung instilled with Ad-KGF demonstrated that CINC-2beta was expressed by alveolar and bronchiolar epithelial cells in vivo. We conclude that CINC-2beta is regulated differently from most other chemokines and that its expression is related to the state of alveolar type II cell differentiation.