The development of birefringent lipids in pre- and postnatal rabbit lungs was studied by polarizing microscopy (PM) and correlated with transmission electron microscopy (TEM). Birefringent lipids first appeared as small scattered particles in the developing alveolar walls at 27 days of gestation. These particles became aggregated, gradually increased in amount in older fetuses, and reached a prenatal maximum at 30 days. Numerous particles were located in the alveolar lumen, beginning in the 30-day fetuses. Further increase in the amount of birefringent lipids occurred in the 60-day-old rabbits. TEM demonstrated cytoplasmic lipid inclusion bodies in the type II pneumocytes at 25 days of gestation. Some of these inclusions were lamellated, but regular lamellated bodies were often seen in older fetuses. It appears that the development of birefringent lipids is closely correlated with the development of lamellated bodies seen with TEM, and PM is a simple, useful method in following the development and maturation of surfactant lipids. The phospholipid component of the pulmonary surfactant is secreted by the type II pneumocytes, and the development of these cells and the surfactant system has been studied in many animal species by various methods. To identify the intra- and extracellular structures related to surfactant secretion, light microscopy [Chiswick et al., 1973], transmission (TEM) and scanning electron microscopy [Kikkawa et al., 1968; Wang et al., 1973], the freeze-fracture technique [Smith et al., 1972; Williams, 1978; Kikkawa and Manabe, 1978], and immunocytochemistry [Ten Have-Opbroek, 1979; Ratal et al., 1979] have been used. The surfactant lipids were associated with lamellated bodies with regular, repeating patterns, and therfore they were detectable