Surfactant proteolipid SP-B is a hydrophobic protein of Mr = 8000 identified in organic solvent extracts of pulmonary surfactant. Analysis of the human SP-B RNA predicts that the active surfactant peptide is derived by proteolysis of an Mr = 40,000 precursor. In the present work, characteristics of synthesis, secretion and processing of SP-B were demonstrated in a pulmonary adenocarcinoma cell line by immunoprecipitation of radiolabelled precursors. Treatment of cells with tunicamycin resulted in synthesis and secretion of unglycosylated proSP-B of Mr = 39,000. Immunoprecipitation of protein produced by in vitro translation of human lung poly(A)+ RNA detected an Mr = 40,000 protein; the size discrepancy is likely related to cleavage of a leader signal sequence. Endoglycosidase-H-sensitive precursors of Mr = 41,000-43,000, pI = 5.1-5.4 were the first isoforms detected within the cells and were processed to endoglycosidase-H-resistant isoforms and secreted. Neuraminidase and endoglycosidase-F-sensitive forms of proSP-B were first detected in the media at 60 min as Mr = 42-46,000 isoforms with pI = 4.6-5.1. Proteolytically processed isoforms of proSP-B were detected primarily in the media and were generated by cleavage of an amino-terminal Mr = 16,000 peptide resulting in Mr = 27,000-33,000 isoforms (pH = 5.6-6.8). The Mr = 27,000-33,000 isoforms were sensitive to neuraminidase, resulting in isoforms with pH = 6.0-6.8. Digestion of the Mr = 27,000-33,000 peptide with endoglycosidase-F resulted in isoforms of Mr = 23,000, pH = 6.0-6.8. The endoglycosidase-F-resistant peptide of Mr = 16,000, pI = 4.2-4.4 was identified with an antiserum generated against synthetic peptides derived from the amino-terminal domain, as deduced from the SP-B DNA sequence. Further proteolytic processing of the Mr = 27,000-33,000 isoforms to the Mr = 8000 peptide detected in surfactant was not observed in this cell line. Thus, in the H441-4 cells (a cell line with morphologic features of Clara cells), SP-B is synthesized as a preproprotein which undergoes cleavage of a signal sequence and addition of asparagine-linked carbohydrate; proSP-B is secreted by processes which are independent of glycosylation. SP-B peptides of Mr = 27,000-33,000 and Mr = 16,000, representing carboxy and amino-terminal domains, accumulate in the media.