Because of the apparent clinical importance of human pulmonary surfactant B (SP-B), the expression of SP-B was directed to the mammary gland of transgenic mice using previously characterized rat whey acidic protein (WAP) regulatory sequences. rWAP/SP-B mRNA was expressed specifically in the mammary gland, and ranged from 1 to 5% of the endogenous WAP mRNA levels. SP-B was detected immunologically in both tissue and milk. The transgene product had an apparent molecular weight of 40-45 kDa, corresponding to the predicted size of the SP-B proprotein. Incubation of an SP-B-enriched fraction of milk with cathepsin D in vitro produced 20-25 kDa species, consistent with cleavage of the amino terminal domain by cathepsin D. This was confirmed using antibodies specific to the carboxy-terminal domain of SP-B. However, the appearance of only the SP-B proprotein in milk suggests that cathepsin D is not involved in the in vivo processing of SP-B. The SP-B proprotein in milk suggests that cathepsin D is not involved in the in vivo processing of SP-B. The SP-B proprotein can be expressed in milk of transgenic mice without any observed effects on mammary gland morphology or lactation.