We examined the effects of diabetes on pulmonary capillary endothelial cell (EC) function in diabetic rabbits. One, three and six weeks after alloxan treatment, rabbits were anesthetized and pulmonary endothelium-bound angiotensin converting enzyme (ACE) activity was estimated from the single-pass transpulmonary hydrolysis of benzoyl-Phe-Ala-Pro (BPAP), an ACE specific substrate. ACE activity significantly decreased in 1- and 3-week diabetic rabbits and returned to control levels at 6 weeks. Capillary dilation, parenchymal hemorrhage and erythrocyte clumping were maximal in 3-week diabetic rabbits. We conclude that in the alloxan-diabetic rabbit, there are transient functional and more persistent morphological alterations.