Pressure-volume measurements and the punch indentation test are used to obtain the bulk modulus (kappa) and the shear modulus (mu) of lung parenchyma of air- and liquid-filled rabbit lungs. Plots of kappa and mu vs. transpulmonary pressure obtained from these measurements indicate that there is very little difference between the elastic behavior of the air- and liquid-filled lung, suggesting that the mechanism of resisting deformation in both cases is similar. On the other hand, from plots of kappa and mu vs. lung volume, it appears that the elastic moduli are higher in the air-filled lung than in the liquid-filled lung at the same volume. These differences, referred to as kappa gamma and mu gamma, as well as the difference in transpulmonary pressures (P gamma), are presumably due to the additional elastic recoil of the air-filled lung provided by alveolar surface tension (gamma). No conclusion could be reached about the shape of the kappa gamma vs. P gamma curve. However, the mu gamma vs. P gamma relationship appears to be approximately linear, with a slope of approximately 0.5. This result agrees qualitatively with the model (T. A. Wilson and H. Bachofen, J. Appl. Physiol. 52: 1064-1070, 1982) in which the part of the parenchyma that provides P gamma is pictured as mechanically analogous to an open cell liquid foam, having mu gamma = 0.4P gamma (J. Appl. Mech. Trans. ASME 51: 229-231, 1984), but it is statistically significant only at high lung volumes.