SP-B deficiency is an autosomal recessive disorder that causes fatal respiratory disease in full-term neonates, whose incidence is unknown. To determine the relative incidence of SP-B deficiency in full-term neonates with severe lung disease, tracheal effluent or bronchoalveolar lavage specimens were analyzed for SP-B and SP-A content by ELISA assays and for aberrantly processed SP-C peptides by western blot assay. Samples from 43 full-term neonates with severe, unexplained, diffuse parenchymal lung disease from 30 medical centers in the USA and Europe were analyzed. 13 infants were confirmed to be SP-B deficient with a mutation identified on both SP-B gene alleles. SP-B was undetectable in all samples from these infants, as well as in samples from 7 infants who were not SP-B deficient. (Sensitivity of SP-B=0: 100%, specificity: 76%). Aberrantly processed SP-C was detected in 19 of 21 lung fluid samples from SP-B deficient infants, and in lung tissue from all affected infants. Of the non-SP-B deficient infants, 15 recovered (including 4 with initial SP-B=0), 4 developed chronic lung disease, and 11 died. The specific etiology of lung disease in these infants was unclear. We conclude that SP-B deficiency was a relatively common cause of lung disease in this selected population. The absence of SP-B in lung fluid was a sensitive, but not specific test for this disorder. Analysis for aberrantly processed SP-C may improve diagnostic accuracy. We speculate that some of the infants who died and were not SP-B deficient may have had as yet unidentified inborn errors of lung metabolism.