Atypical alveolar hyperplasia (AAH) has recently been described in human lungs in association with primary lung cancer, particularly adenocarcinoma. Unlike proximal bronchogenic carcinoma, peripheral (parenchymal) adenocarcinoma of the lung does not have a well-recognized progenitor lesion. Epidemiological morphometric, and cytofluorometric data in the literature suggest that AAH is a candidate premalignant entity. In this study, 97 AAH lesions were found in lungs resected from 29 patients (1-13 lesions per case, mean 3.5) being treated for presumed carcinoma (25/29 had adenocarcinoma). From a study case-load of 285 adenocarcinoma-bearing lungs, the AAH incidence was 8.8 per cent. Sections of 67 AAH lesions from 19 patients were stained using monoclonal antibodies against Ki67 (MIB1), p53 (DO7), and c-erbB-2 (NCL-CB11). Ki67 was expressed in up to 10 per cent of AAH nuclei. Thirty-nine lesions (58 per cent) showed stainable p53 protein, while five (7 per cent) expressed membrane c-erbB-2 oncoprotein. These latter five lesions were all strongly positive for p53, and both p53 and c-erbB staining was associated with increased cellular crowding and pleomorphism in AAH. These data demonstrate that AAH exhibits some genetic changes associated with malignancy and thereby support the hypothesis that AAH is premalignant.