We present plasma membrane (PM) internalization responses of type I alveolar epithelial cells to a 50 mosmol/l increase in tonicity. Our research is motivated by interest in ATI repair, for which endocytic retrieval of PM appears to be critical. We validated pharmacological and molecular tools to dissect the endocytic machinery of these cells and used these tools to test the hypothesis that osmotic stress triggers a pathway-specific internalization of PM domains. Validation experiments confirmed the fluorescent analogs of lactosyl-ceramide, transferrin, and dextran as pathway-specific cargo of caveolar, clathrin, and fluid-phase uptake, respectively. Pulse-chase experiments indicate that hypertonic exposure causes a downregulation of clathrin and fluid-phase endocytosis while stimulating caveolar endocytosis. The tonicity-mediated increase in caveolar endocytosis was associated with the translocation of caveolin-1 from the PM and was absent in cells that had been transfected with dominant-negative dynamin constructs. In separate experiments we show that hypertonic exposure increases the probability of PM wound repair following micropuncture from 82 ± 4 to 94 ± 2% (P < 0.01) and that this effect depends on Src pathway activation-mediated caveolar endocytosis. The therapeutic and biological implications of our findings are discussed.