Alveolar lining fluid normally contains proteins of important physiological, antioxidant, and mucosal defense functions [such as albumin, immunoglobulin G (IgG), secretory IgA, transferrin, and ceruloplasmin]. Because concentrations of plasma proteins in alveolar fluid can increase in injured lungs (such as with permeability edema and inflammation), understanding how alveolar epithelium handles protein transport is needed to develop therapeutic measures to restore alveolar homeostasis. This review provides an update on recent findings on protein transport across the alveolar epithelial barrier. The use of primary cultured rat alveolar epithelial cell monolayers (that exhibit phenotypic and morphological traits of in vivo alveolar epithelial type I cells) has shown that albumin and IgG are absorbed via saturable processes at rates greater than those predicted by passive diffusional mechanisms. In contrast, secretory component, the extracellular portion of the polymeric immunoglobulin receptor, is secreted into alveolar fluid. Transcytosis involving caveolae and clathrin-coated pits is likely the main route of alveolar epithelial protein transport, although relative contributions of these internalization steps to overall protein handling of alveolar epithelium remain to be determined. The specific pathways and regulatory mechanisms responsible for translocation of proteins across lung alveolar epithelium and regulation of the cognate receptors (e.g., 60-kDa albumin binding protein and IgG binding FcRn) expressed in alveolar epithelium need to be elucidated.