We have examined the interconversion of cortisone (E) and cortisol (F) in rat lung homogenate and microsomal fraction and in the isolated rat lung perfused with Krebs bicarbonate solution containing 4.5% albumin. In the perfused lung the apparent Km was 5.1 μM E and the Vmax was 9nmol·g-1 · min-1. The ability of the lung to reduce E to F was enhanced both by 7 days prior exposure of the rat to an ambient temperature of 2°C and by starvation of the rat for 3 days. The activity was inhibited by adrenalectomy and castration of 7 days duration. Whereas little steroid oxidation occurred in the perfused lung, preparations of lung homogenatcs and microsomal fraction readily reduced or oxidised the 11-position of the corticoid molecule depending on the preponderance of either NADPH or NADP, respectively. We conclude, that the predominance of the reductive reaction in the whole rat lung under physiological conditions reflects the very active pentose-phosphate shunt in the lung, which produces NADPH. We suggest that this ability of the lung to activate E to F may exert a fine control over the arterial concentrtion of unbound, physiologically active, 11-hydroxylated steroid.