Membrane associated intercellular adhesion molecule-1 (mICAM-1; CD54) is constitutively expressed on the surface of type I alveolar epithelial cells (AEC). Soluble ICAM-1 (sICAM-1) may be produced by proteolytic cleavage of mICAM-1 or by alternative splicing of ICAM-1 mRNA. In contrast to inducible expression seen in most cell types, sICAM-1 is constitutively released by type I AEC and is present in normal alveolar lining fluid. Therefore, we compared the mechanism of sICAM-1 production in primary cultures of two closely juxtaposed cells in the alveolar wall, AEC and pulmonary microvascular endothelial cells (PVEC). AEC, but not PVEC, demonstrated high level baseline expression of sICAM-1. Stimulation of AEC with TNF or LPS resulted in minimal increase in AEC sICAM-1, while PVEC sICAM-1 was briskly induced in response to these signals. AEC sICAM-1 shedding was significantly reduced by treatment with a serine protease inhibitor, but not by cysteine, metalloprotease, or aspartic protease inhibitors. In contrast, none of these inhibitors effected sICAM-1 expression in PVEC. RT-PCR, followed by gel analysis of total RNA suggests that alternatively spliced fragments are present in both cell types. However, a 16-mer oligopeptide corresponding to the juxtamembrane region of mICAM-1 completely abrogated sICAM-1 shedding in AEC but reduced stimulated PVEC sICAM-1 release by only 20%. Based on these data, we conclude that the predominant mechanism of sICAM-1 production likely differs in the two cell types from opposite sides of the alveolar wall.