Although growth hormone (GH) receptor (GHR) mRNA and protein are present in fetal tissues such as the lung, there is little evidence that GH mediates growth in the fetus. We have identified functional responses to GH in fetal rat lung epithelia and suggest a possible role for GHR in the developing lung. GHR mRNA in lung extracts was high before birth at day 16 of gestation (16f), decreased to low levels at day 22f but increased again after birth. At day 20f GHR mRNA levels were higher in lung than in liver, whereas growth hormone binding protein mRNA levels were approximately equal in lung and liver. Stimulation of primary cell cultures of day 19f lung epithelia with GH caused increased tyrosine phosphorylation in specific proteins, demonstrating functional GHR. Lung fibroblasts isolated at the same time did not respond to GH. Ligand and Northern blot analysis of the epithelial cultures revealed that GH stimulation increased insulin-like growth factor binding protein-2 (IGFBP-2) activity and mRNA. These experiments demonstrate the functional activity of GHR, specifically in fetal lung epithelium. We suggest that one role for GH in vivo may be indirectly to modify insulin-like growth factor activity in the developing fetal lung by increasing IGFBP-2.