Aims: In the lung, stimulation of alveolar macrophages impairs function of the alveolar barrier causing pulmonary edema, which in turn impairs O2-supply to alveolar epithelial and endothelial cells. This study was performed to test whether stimulation with LPS increases the expression of pro-inflammatory mediators, whether hypoxia aggravates this effect, and whether stimulation has consequences on barrier tightness and ion transport. Methods: Rat alveolar macrophages (NR8383), primary rat alveolar type II cells (ATII), and rat lung microvascular endothelial cells (RLMVEC) were grown in mono-and co-culture on transwell filters and treated with LPS (1mg/ml) for 4h, 24h and 48h in normoxia and hypoxia (1.5% O2). mRNA expression was measured by qRT-PCR. Barrier function and ion transport were measured in Ussing chambers. Results: 4h stimulation with LPS in normoxia and hypoxia increased TNF-a and IL-6 expression, which resulted largely from macrophages, but LPS increased cytokine- expression from ATII and endothelial cells as well. After 24h and 48h of stimulation, TNF-a mRNA had returned to baseline despite continued exposure. Hypoxia alone did not increase the expression of cytokines. Neither hypoxia nor LPS affected the expression of MCP-1, MMP-12, and COX-1. In presence of macrophages, both 24h and 48h exposure to LPS and hypoxia decreased the electrical resistance of the co-cultures, whereas ATII cell monolayers were not affected. Ussing chamber measurements indicate that LPS increased ion transport in ATII cell monocultures. In contrast, in presence of macrophages (with or without RLMVEC), LPS and hypoxia dramatically impaired Na-channel mediated transport. LPS stimulated Na/K-ATPase activity. Conclusion: These results demonstrate that mainly alveolar macrophages express pro- inflammatory mediators upon LPS-stimulation in normoxia and hypoxia. Also, macrophage- stimulation impairs alveolar Na-transport and increases alveolar permeability.