Lesions were induced in the lungs of specific-pathogen-free F344 rats by chronic tobacco smoke exposure. Animals exposed to 7 cigarettes/day were killed after 1, 1.5, or 2 years of exposure. Parallel lifetime exposures induced pulmonary tumors in 9% of the animals. In serially killed animals, four types of lesions were found: 1) perivascular or peribronchiolar accumulation of lymphoreticular cells, 2) fibrotic and cellular enlargement of peribronchiolar septa, 3) type II cell hyperplasia with septal fibrosis, and 4) air-space enlargement (emphysema). However, emphysema occurred only in animals exposed to a higher (10 cigarettes) dose of tobacco smoke. Ultrastructural studies showed all of the focal lesions to be infiltrated by cells typical of the inflammatory response. The type II hyperplastic and peribronchiolar alveolar lesions involved larger portions of the parenchyma in fibrotic changes but differed in structure, location, and frequency. The incidence of the peribronchiolar alveolar lesions was temporally related to tumor incidence.