Corticosteroid administration during radiation pneumonitis in mice markedly improves the physiologic abnormalities and decreases mortality, an effect that has been attributed to the stimulation of surfactant synthesis and secretion by type 2 alveolar epithelial cells. In the present experiments we explored the effects of corticosteroids on the replicative activity of type 2 cells of lethally irradiated lungs at the height of the radiation reaction. The labeling index of type 2 cells of irradiated mice was increased threefold above that of sham-irradiated controls. Corticosteroids given continuously from 10 weeks after thoracic irradiation further increased the type 2 cell labeling index another threefold above that of irradiated untreated mice. The enhanced reproductive activity of type 2 cells following thoracic irradiation is seen as a protective response that is augmented by corticosteroids, whose effect may be both to improve the physiology of the alveolar surface and to maintain the population of alveolar epithelial cells. The bearing of this result on the controversial role of the type 2 cell as a target in radiation pneumonitis is discussed.