Surfactant protein C (SP-C) is a 35 amino acid lung-specific hydrophobic peptide that enhances the biophysical activity of surfactant phospholipid. SP-C is synthesized as a 21 kD propeptide (proSP-C{21}) and post-translationally processed to yield the 3.7 kD surface active alveolar form via cleavage of NH{2} and COOH flanking propeptides. Recently, the importance of SP-Cto lung health and disease has been underscored by observations that heterozygous expression of over 20 different mutations in the SP-C gene in humans is associated with chronic interstitial lung disease (ILD). The overall goal of this project is to extend well-established studies aimed at understanding the molecular mechanisms underlying SP-C biosynthesis and to assess the consequences of expression of a class of aggregation prone SP-C mutants associated with ILD. The experimental approach involves both reductionist and integrative approaches to dissect out key elements in the targeting and post-translational processing of proSP-C{21} in the secretory pathway. Specific Aim 1 will test the hypotheses that targeting of proSP-C to the regulated secretory pathway as an integral membrane protein is mediated by a PPDY motif within the NH{2} flanking propedtide that modulates interactions with specific ligands and chaperones including W-W domains. These interactions will be studied both in situ using binding assays for recombinant proSP-C and in vitro utilizing proteomic analyses of co-immunoprecipitation products. Specific Aim 2 will extend studies directed at identification and characterization of proteases mediating processing cleavages of proSP-C. Candidate enzymes we have identified include aspartyl proteases Napsin A and Pepsinogen C that will be studied using in vitro translation and proteolysis of proSP-C integrated into membrane vesicles, in situ proteolysis using purified enzyme and recombinant proSP-C substrate, and siRNA approaches in cultured type 2 cells. In Specific Aim 3, mechanisms underlying cellular toxicity resulting from the expression of aggregating SP-C isoforms and the role of agents which modulate protein folding and cell function will be determined using well established in vitro models. These results will then be extended in vivo using transgenic expression of mutant SP-C constructs utilizing recently improved lung- and cell- specific promoter elements developed in our laboratory to create mice which express mutant SP-C precursors exclusively in alveolar type 2 cells.