The origin, topography, and ultrastructural morphology of the alveolar and bronchiolar type III cell in various species are reviewed. The type III cell has two distinctive features that are not present in other lung epithelial cells: a microvillous brush border and bundles of fine filaments. Regarding its topography, the cell appears to have a preferential although variable localization in different species. The morphology of this cell as revealed by our transmission and scanning electron microscopic studies in the rat lung is described and discussed in relation to the various supposed functions, that is, absorptive, chemoreceptive, and contractile.