This study was undertaken to determine the site of initial pulmonary injury in smoke inhalation. A hotel fire in Houston, Texas, resulted in the on-site deaths of 10 white people (2 to 62 years of age). All underwent autopsy examinations which included measurement of carbon monoxide (CO) and cyanide (CN) levels, as well as electron microscopy of lung samples. Average CO levels of 40% and CN levels of 0.6 ppm were obtained. In all cases, the lungs were heavy, hyperemic, and edematous with soot staining the tracheobronchial mucosa. Light microscopy showed soot, pulmonary congestion, and edema. Electron microscopy confirmed the presence of interstitial and intraalveolar congestion and edema. Carbon particles were also present, and occasionally were seen undergoing phagocytosis by alveolar macrophages. Intracellular edema with focal bleb and vesicle formation was prominent within Type I pneumocytes in 9 of 10 cases. Endothelial cells showed similar but much less severe changes, lacking the distinct blebs seen in the Type I cells. This investigation reveals that smoke, like ammonia inhalation and nitric acid instillation, appears to cause pulmonary edema by initial injury to the Type I pneumocyte.