A method is described for isolation of enriched preparations of nonciliated bronchiolar epithelial (Clara) and alveolar type II cells from hamster lungs. Clara cells were enriched to 48% (1.7 +/- 0.7 x 10(5) cells per hamster), and type II cells to 86% (3.4 +/- 1.7 x 10(6) cells per hamster). Analysis of biotransformation activities indicated concentration of 7-ethoxycoumarin deethylase activity in Clara cells, whereas glutathione S-transferase was more widely distributed among cell types, with highest activity in type II cells. The significance of differential cellular localization of activation and detoxification activities to susceptibility to pulmonary toxicants, is discussed.