Keratinocyte growth factor (KGF) has efficacy in several experimental models of lung injury; however, the mechanisms underlying KGF's protective effect remain incompletely understood. This study was undertaken to determine whether KGF augments barrier function in primary rat alveolar epithelial cells grown in culture, specifically whether KGF alters tight junction function via claudin expression. KGF significantly increased alveolar epithelial barrier function in culture as assessed by transepithelial electrical resistance (TER) and paracellular permeability. Fluorescence-activated cell sorting of freshly isolated type 1 (AT1) and type 2 (AT2) cells followed by quantitative real-time RT-PCR revealed that more than 97% of claudin mRNA transcripts in these cells were for claudins-3, -4, and -18. Using cultured AT2 cells, we then examined the effect of KGF on the protein levels of the claudins with the highest mRNA levels: -3, -4, -5, -7, -12, -15, and -18. KGF did not alter the levels of any of the claudins tested, nor of zona occludens-1 (ZO-1) or occludin. Moreover, localization of claudins-3, -4, -18, and ZO-1 was unchanged. KGF did induce a marked increase in the apical perijunctional F-actin ring. Actin depolymerization with cytochalasin D blocked the KGF-mediated increase in TER without significantly changing TER in control cells. Together, these data support a novel mechanism by which KGF enhances alveolar barrier function, modulation of the actin cytoskeleton. In addition, these data demonstrate the complete claudin expression profile for AT1 and AT2 cells and indicate that claudins-3, -4, and -18 are the primary claudins expressed in these cell types.