A low molecular weight hydrophobic protein was isolated from porcine lung lavage fluid using silicic acid and Sephadex LH-20 chromatography. The protein migrated with an apparent molecular weight of 5000-6000 on SDS-PAGE under reducing and nonreducing conditions. Gels run under reducing conditions also showed a minor band migrating with a molecular weight of 12,000. Amino acid compositional analysis and sequencing data suggest that this protein preparation contains intact surfactant protein SP-C and about 30% of truncated SP-C (N-terminal leucine absent). The surfactant protein was combined with perdeuterated dimyristoylphosphatidylcholine (DMPC-d54) in multilamellar vesicles. The protein enhanced the rate of adsorption of the lipid at air-water interfaces. The ability of the protein to alter normal lipid organization was examined by using high-sensitivity differential scanning calorimetry (DSC) and 2H nuclear magnetic resonance spectroscopy (2H NMR). The calorimetric measurements indicated that the protein caused a decrease in the temperature maximum (Tm) and a broadening of the phase transition. At a protein concentration of 8% (w/w), the enthalpy change of transition was reduced to 4.4 kcal/mol compared to 6.3 kcal/mol determined for the pure lipid. NMR spectral moment studies indicated that protein had no effect on lipid chain order in the liquid-crystal phase but reduced orientational order in the gel phase. Two-phase coexistence in the presence of protein was observed over a small temperature range below the pure lipid transition temperature. Spin-lattice relaxation times (T1) were not substantially affected by the protein. Transverse relaxation time (T2e) studies suggest that the protein influences slow lipid motions.