Pulmonary neuroendocrine (NE) cells including the innervated clusters of NE cells--neuroepithelial bodies (NEB)--are difficult to study because of their small numbers and diffuse distribution within the airway mucosa of the lung. We have previously reported a method for isolation and culture of NE cells from rabbit fetal using a combination of mechanical and enzymatic dissociation followed by gradient centrifugation. This method provides single cell suspension of mixed lung cells enriched in NE cells, particularly those originating from NEB. This study further validates our in vitro model by detailed morphologic characterization of cultured NEB cells using high resolution light microscopy, transmission and scanning electron microscopy, HPLC for detection of serotonin (5-HT), and molecular (Northern blot) analysis of mRNA encoding for 5-HT synthesizing enzymes, tryptophane hydroxylase, and aromatic L-amino acid decarboxylase. In addition the effects of hypoxia on NEB cells in vitro were investigated to define the role of these cells as possible airway chemoreceptors. Exposure of NEB cultures to hypoxia resulted in decreased intracellular content of 5-HT accompanied by increased exocytosis of dense core vesicles (DCV). The amount of 5-HT release correlated with the degree of hypoxia, suggesting modulation by ambient pO2 levels. The role of Ca2+ ions in exocytosis of DCV and 5-HT release from NEB cells was tested in experiments with Ca2+ ionophore (A23187). Exposure of cultures to 5 micrograms/ml of ionophore resulted in up to 40% reduction in 5-HT content of NEB cultures as well as increased exocytosis of DCV. Our overall findings are consistent with a view that NEB cells are chemosensory in nature and that Ca2+ signaling pathway is involved in stimulus-secretion coupling. Further refinements in cell separation and culture methodology are required before more detailed investigation of NEB cell membrane properties, signal transduction mechanisms, and intracellular signaling pathways can be carried out.