Free alveolar cells from guinea pig lung producing the fourth component of C (C4) were identified, enumerated, and characterized by using anti-C4 Fab-peroxidase conjugates in conjunction with transmission electron microscopy. The C4-producing cell population consisted of: 1) alveolar macrophages (AM); 2) less well differentiated phagocytes similar in morphology to exudate macrophages; and 3) weakly phagocytic secretory cells with numerous profiles of rough-surfaced endoplasmic reticulum (ER). Internal immunolabeling allowed the visualization of C4 in the ER, perinuclear space, and Golgi complex of producer cells and its release at cell surfaces; synthesis of C4 in vitro was sensitive to inhibitors both of protein synthesis and messenger RNA function. The percentage of free alveolar cells from normal animals competent for C4 production as indicated by cell surface immunolabeling was approximately 1% of the total cells obtained by lavage. Transnasal infection with Listeria monocytogenes, generation of a pulmonary granulomatous reaction by i.v. injection of heat-killed BCG, and aerosol infection of nonvaccinated animals with Mycobacterium tuberculosis each resulted in an increase in numbers of AM and exudate macrophage-like free alveolar cells competent for C4-production.