Understanding of the functions and regulation of the phenotype of the alveolar type I epithelial cell has lagged behind studies of its neighbor the type II cell because of lack of cell-specific molecular markers. The recent identification of several proteins expressed by type I cells indicates that these cells may play important roles in regulation of cell proliferation, ion transport and water flow, metabolism of peptides, modulation of macrophage functions, and signaling events in the peripheral lung. Cell systems and reagents are available to characterize type I cell biology in detail, an important goal given that the cells provide the extensive surface that facilitates gas exchange in the intact animal.