The purpose of this review is to highlight areas in alveolar cell biology in which our understanding of the effects of mechanical stress have been advanced in the last year, focusing on intracellular signal transduction pathways, the surfactant system, and cell injury and repair. Mechano-transduction pathways are only now beginning to be elucidated in alveolar cells. The importance of the mitogen-activated protein kinase, G protein, and growth factor systems is emphasized. The research conducted in the last year has also stressed the importance of alveolar cell cross-talk, with surfactant exocytosis being facilitated through parathyroid hormone-related peptide and leptin and calcium in interstitial fibroblasts and endothelial cells, respectively. Finally, the importance of deformation-induced plasma membrane breaks is emphasized. Alveolar cells were found to exocytose intracellular lipid vesicles to the plasma membrane-not only to prevent cell breaks but also to reseal cell breaks. This dynamic process was a stronger determinant of cell breaks than the prestress properties of the cytoskeleton. All of these exciting findings provide further potential treatment targets for ventilator-induced lung injury.