Surfactant protein B (SP-B, mol wt 9,000, reduced) is a low-molecular-weight hydrophobic protein found in organic extracts of lung surfactant. The interaction of iodinated bovine SP-B (125I-SP-B) and isolated rat alveolar type II cells was examined. The association of SP-B with the lung cells was time and temperature dependent; type II cells exhibited time-dependent binding (at 4 degrees C) and uptake (at 37 degrees C) of SP-B. Binding of phospholipid-poor 125I-SP-B was linearly related to the external SP-B concentration from 0.25 to 60 microgram/ml and was not inhibited by a 60-fold excess of unlabeled SP-B. However, the binding of 125I-SP-B reconstituted with bovine surfactant or with phospholipid-containing liposomes occurred through a high-affinity, saturable process and could be inhibited with unlabeled SP-B. By Scatchard analysis, half-maximum binding in the presence of surfactant occurred at 3.1 +/- 0.7 micrograms SP-B/ml. Saturable binding of SP-B reconstituted with surfactant also occurred with other cell types. The results indicate that SP-B was bound and internalized by type II cells. The apparent lack of specificity in the absence of phospholipid may have been due to the self-association of SP-B. The reconstitution of SP-B with phospholipid altered the binding of phospholipid-poor SP-B from a nonspecific process to a high-affinity process consistent with a cell surface binding site.