Surfactant accumulates in alveolar macrophages of granulocyte-macrophage colony-stimulating factor (GM-CSF) knockout (KO) mice and pulmonary alveolar proteinosis (PAP) patients with a functional loss of GM-CSF resulting from neutralizing anti-GM-CSF antibody. Alveolar macrophages from PAP patients and GM-CSF KO mice are de-ficient in peroxisome proliferator-activated receptor-gamma (PPARgamma) and ATP-binding cassette (ABC) lipid transporter ABCG1. Previous studies have demonstrated that GM-CSF induces PPARgamma. We therefore hypothesized that PPARgamma promotes surfactant catabolism through regulation of ABCG1. To address this hypothesis, macrophage-specific PPARgamma (MacPPARgamma) knockout mice were utilized. MacPPARgamma KO mice develop foamy, lipid-engorged Oil Red O positive alveolar macrophages. Lipid analyses revealed significant increases in the cholesterol and phospholipid contents of MacPPARgamma KO alveolar macrophages and extracellular bronchoalveolar lavage (BAL)-derived fluids. MacPPARgamma KO alveolar macrophages showed decreased expression of ABCG1 and a deficiency in ABCG1-mediated cholesterol efflux to HDL. Lipid metabolism may also be regulated by liver X receptor (LXR)-ABCA1 pathways. Interestingly, ABCA1 and LXRbeta expression were elevated, indicating that this pathway is not sufficient to prevent surfactant accumulation in alveolar macrophages. These results suggest that PPARgamma mediates a critical role in surfactant homeostasis through the regulation of ABCG1.