The importance of pulmonary surfactant in maintaining normal lung function, and the observations that alterations in endogenous surfactant contribute to the lung dysfunction associated with acute lung injury (ALI) and the acute respiratory distress syndrome (ARDS), provide a rationale for administering exogenous surfactant in this setting. The results of clinical trials have been variable, however, in part due to the various surfactant preparations used, the different delivery and dosing methods employed, and the types of patients targeted for this therapy. Based on the insight gained from these studies, ongoing trials have modified these factors to optimize outcome, including one trial that is focusing on patients with direct lung insults such as pneumonia and aspiration. The future of surfactant therapy may well take advantage of the recently described host defense functions of this material. Based on extensive in vitro data as well as in vivo animal studies demonstrating the anti-inflammatory and antibacterial functions of various surfactant components, administration of surfactant earlier in the course of the disease, when lung inflammation is present but before severe lung dysfunction occurs, may prove to be optimal. This review discusses both the biophysical and host defense functions of surfactant in the context of novel therapeutic approaches for patients with ALI/ARDS.