Rat alveolar epithelial cells (AEC) in primary culture transdifferentiate from a type II (AT2) toward a type I (AT1) cell-like phenotype, a process that can be both prevented and reversed by keratinocyte growth factor (KGF). Microarray analysis revealed that these effects of KGF are associated with up-regulation of key molecules in the mitogen-activated protein kinase (MAPK) pathway. To further explore the role of three key MAPK (i.e., extracellular signal-related kinase [ERK] 1/2, c-Jun N-terminal kinase [JNK] and p38) in mediating effects of KGF on AEC phenotype, primary rat AEC cultivated in minimal defined serum-free medium (MDSF) were treated with KGF (10 ng/ml) from Day 4 for intervals up to 48 hours. Exposure to KGF activated all three MAPK, JNK, ERK1/2, and p38. Inhibition of JNK, but not of ERK1/2 or p38, abrogated the ability of KGF to maintain the AT2 cell phenotype, as evidenced by loss of expression of lamellar membrane protein (p180) and increased reactivity with the AT1 cell-specific monoclonal antibody VIIIB2 by Day 6 in culture. Overexpression of JNKK2, upstream kinase of JNK, increased activation of endogenous c-Jun in association with increased expression of p180 and abrogation of AQP5, suggesting that activation of c-Jun promotes retention of the AT2 cell phenotype. These results indicate that retention of the AT2 cell phenotype by KGF involves c-Jun and suggest that activation of c-Jun kinase may be an important determinant of maintenance of AT2 cell phenotype.