The functions of the bronchiolar Clara cell are not known although numerous morphological investigations in many species have led to the hypothesis that the cell is secretory. The objectives of this research are to elucidate the secretory nature of the Clara cell, identify and characterize those secretions and determine their extracellular functions. Using a model system, developed in this laboratory, involving isolated and purified Clara cells, we have identified a low molecular weight protein (12 Kd) as the major protein secreted by those cells. Using antisera prepared against this low molecular weight protein we have demonstrated that it is also present in the pulmonary extracellular lining accounting for approximately 10% of the total proteins secreted by the pulmonary epithelium. We have isolated and purified this low molecular weight protein from the extracellular lining, analyzed it for its amino acid composition and general electrophoretic properties. The protein appears to consist of one major and five minor isoforms. The protein has weak inhibitory activity against human PMN elastase and papain. These studies identify the low molecular weight protein as a major secretory product of the Clara cell.