We have investigated whether enhanced secretion of transforming growth factor‐β (TGF‐β) by distal respiratory epithelial cells was associated with the development of bleomycin‐induced pulmonary fibrosis. Type 2 pneumocyte‐enriched preparations of bronchioloalveolar epithelial cells from normal mouse lung tissue released latent TGF‐β when cultured in serum‐free medium. TGF‐β in culture supernatants could be detected using a sensitive enzyme immunoassay which employed enzyme complex amplification as a reporter system, as well as by a radiolabelled receptor competition assay. Exposure to bleomycin and other potentially fibrogenic stimuli in vitro did not stimulate production of TGF‐β by the epithelial cells but release was enhanced by treatment of the cells with interferon‐γ. Type 2 pneumocyte‐enriched cell preparations obtained following induction of a pulmonary inflammatory response by administration of intratracheal bleomycin to susceptible C57BL/6 mice did not demonstrate increased release of TGF‐β in culture. However, the concentration of TGF‐β in bronchoalveolar lavage (BAL) fluids was significantly elevated compared to controls at 1 and 2 weeks after bleomycin‐induced injury in these mice. No such increase was detected in BAL fluids from BALB/c mice, which are resistant to the effects of bleomycin. These results provide no support for a pathogenetic role of alveolar epithelial cell‐derived TGF‐β in bleomycin‐induced pulmonary fibrosis. Nevertheless, elevated levels of TGF‐β in BAL fluids may provide a marker of the progression of pulmonary injury to fibrosis.