Although increased lung expansion markedly alters lung growth and epithelial cell differentiation during fetal life, the effect of increasing lung expansion after birth is unknown. We hypothesized that increased basal lung expansion, caused by ventilating newborn lambs with a positive end-expiratory pressure (PEEP), would stimulate lung growth and alter alveolar epithelial cell (AEC) proportions and decrease surfactant protein mRNA levels. Two groups of lambs were sedated and ventilated with either 0 cmH(2)O PEEP (controls, n = 5) or 10 cmH(2)O PEEP (n = 5) for 48 h beginning at 15 +/- 1 days after normal term birth. A further group of nonventilated 2-wk-old lambs was used for comparison. We determined wet and dry lung weights, DNA and protein content, a labeling index for proliferating cells, surfactant protein mRNA expression, and proportions of AECs using electron microscopy. Although ventilating lambs for 48 h with 10 cmH(2)O PEEP did not affect total lung DNA or protein, it significantly increased the proportion of proliferating cells in the lung when compared with nonventilated 2-wk-old controls and lambs ventilated with 0 cmH(2)O PEEP (control: 2.6 +/- 0.5%; 0 PEEP: 1.9 +/- 0.3%; 10 PEEP: 3.5 +/- 0.3%). In contrast, no differences were observed in AEC proportions or surfactant protein mRNA levels between either of the ventilated groups. This study demonstrates that increases in end-expiratory lung volumes, induced by the application of PEEP, lead to increased lung growth in mechanically ventilated 2-wk-old lambs but do not alter the proportions of AECs.