DT-diaphorase (DTD) is a flavoprotein which catalyzes obligate two-electron reduction of a diverse group of substrates. We have reported previously that non-tumorigenic mouse lung alveolar type-II pneumocytes have high DTD activity, while cell lines derived from lung tumors do not. In contrast, other investigators, using human lung tissue, reported increased DTD activity in tumors compared with normal tissue. We therefore investigated DTD associated with mouse lung neoplasia in vivo as well as in vitro. Pulmonary tumors had far less DTD activity compared with normal mouse lung. Correspondingly, a tumorigenic mouse lung cell line which arose as a spontaneous transformant of a normal cell line had very low DTD activity compared with non-tumorigenic lung cells. DTD-specific mRNA levels were also much higher in normal cell lines than in neoplastic ones. DTD was localized histo-chemically in type-ll pneumocytes in situ, but was not observed by this technique in normal bronchiolar epithelia or in tumor cells. These data show that, unlike what has been observed in human lung cancer, a marked decrease in DTD content and activity accompanied mouse lung tumorigenesis in vivo and neoplastic transformation in vitro.