A pool of acid hydrolases exists within the acellular lining material of the alveoli and distal airways of the lungs. These extracellular hydrolases, obtained using pulmonary lavage procedures, appear to be of a selected variety insofar as some hydrolases (beta-N-acetylglucosaminidase and alpha-mannosidase) are highly active while others (beta-glucuronidase and arylsulfatase) are barely detectable. The origins of these hydrolases were investigated. Neither leakage of serum nor cell damage can account for the presence of the extracellular hydrolases in lavage effluents. Electrophoretic mobilities on acrylamide gels indicate that the extracellular hydrolases generally differ from those found in serum. Cytoplasmic soluble enzymes such as lactate dehydrogenase were used to monitor cell damage and show that the extracellular hydrolases did not originate from cell leakage during the lavage procedure. Hydrolases similar to those found extracellularly are associated with highly purified lysosome-free lamellar bodies isolated from homogenates of lung. The extracellular hydrolases are probably selected by the type 2 cells of the pulmonary alveolar epithelium during their selection of lamellar bodies.