Expression of the pulmonary surfactant-associated proteins SP-B and SP-C is under both developmental and hormonal regulation. We used human fetal lung to investigate developmental changes and the mechanism of glucocorticoid stimulation of SP-B and SP-C gene expression. There were similar approximately 3-fold increases in SP-B cytoplasmic mRNA content and transcription rate comparing lung samples of 24 wk versus 16 wk gestation. During 5 days of lung explant culture without hormones, the transcription rate increased for SP-B and decreased for SP-C, paralleling changes in mRNA content. Treatment with 100 nM dexamethasone maximally increased transcription of the SP-B gene (approximately 3-fold) and SP-C gene (approximately 11-fold) after 2 and 8 h, respectively, similar to changes in mRNA content. In dose-response studies, the maximal increase in transcription rate occurred at approximately 10 nM dexamethasone for SP-B and at > or = 100 nM for SP-C. Induction of SP-B mRNA content and transcription rate were not affected by prior cycloheximide exposure, whereas induction of SP-C mRNA was decreased by as little as 1 h exposure to inhibitor. We conclude that glucocorticoids, acting directly in type II cells, regulate the SP-B and SP-C genes primarily at the level of transcription. Induction of SP-C, but not SP-B, requires ongoing protein synthesis which likely reflects involvement of a labile transcription factor. The difference in glucocorticoid sensitivity may indicate that the two surfactant protein genes contain glucocorticoid response elements with different affinities for receptor.