Fatty acid synthesis by subcellular fractions of rabbit lung was studied by measuring the incorporation of either radioactive acetyl coenzyme A or malonyl coenzyme A into long-chain fatty acids. Evidence is presented to support the conclusions that the 95,000 g-supernatant fraction contains the enzymes, i.e., fatty acid synthetase and acetyl coenzyme A carboxylase, necessary for de novo fatty acid synthesis and is capable of synthesizing long-chain fatty acids, probably palmitic acid, under the appropriate conditions. The mitochondrial fraction incorporates the short-chain coenzyme A derivatives into fatty acids predominantly by the elongation pathway. It is suggested that the palmitic acid synthesized in vivo by the de novo fatty acid synthetic pathway, demonstrated in vitro in rabbit lung, may be a source of the lecithin palmitic acid utilized in the synthesis of pulmonary surfactant.