BACKGROUND: The effects of immaturity and hypoplasia of the premature lung can be affected by proinflammatory stimuli in late gestation or the postnatal period from acute lung injury secondary to intensive ventilatory management or the metabolic consequences of surgery. These stimuli alter alveolarization and contribute to bronchopulmonary dysplasia. While prior research has focused primarily on late gestational effects of inflammation on alveolar development, we sought to study whether early gestational exposure to endotoxin affects branching morphogenesis, during the critical pseudoglandular stage of lung development. METHOD: Gestational day 15 (E15) fetal rat lung explants (term = 22 d) were treated with either 200 ng/mL or 2 microg/mL lipopolysaccharides (LPS) with controls and examined daily by phase microscopy. After 5 d, explants were fixed in 4% formaldehyde, paraffin embedded, and sectioned at 5 mum in the coronal plane. Immunohistochemical analysis was performed with platelet endothelial cell adhesion molecule (PECAM) to define endothelial cells, vascular endothelial growth factor (VEGF) to examine endothelial mitogenesis, and COX-2 antibodies as a marker for prostaglandin synthesis. Real-time PCR examined inducible nitric oxide synthase (iNOS), FGF9, FGF10, and FGFr2 gene expression. Air space fraction and airway epithelium were analyzed with Image J software. RESULTS: Phase contrast microscopy and hematoxylin-eosin histology revealed progressive, dose-related changes in air sac contraction and interstitial thickening. Compared with control E15 explants, day 5 explants incubated with high dose LPS demonstrated thickened and shrunken airway sacs with stunted branching and increased matrix deposition in interstitial areas. By immunohistochemical staining, COX-2 was quantitatively increased after high dose LPS exposure, while PECAM was reduced. VEGF expression was unaltered. LPS increased iNOS, but decreased FGF9, FGF10, and FGFr2 gene expression. CONCLUSIONS: These data support evidence for an inflammatory effect of LPS on the early phase of lung development in the fetal rat, affecting branching morphogenesis during the pseudoglandular phase. Fetal endothelial cells are clearly affected, while COX-2 elevation suggests activation of an as yet undefined fetal pulmonary inflammatory cascade. We speculate that proinflammatory stimuli may ultimately lead to abnormal pulmonary development via fibroblastic growth factor (FGF)-directed mechanisms that affect epithelial-mesenchymal interaction and differentiation at a much earlier gestational age than was previously recognized.