Shortened telomeres are a normal consequence of cell division. However, telomere shortening past a critical point results in cellular senescence and death. To determine the effect of telomere shortening on lung, four generations of B6.Cg-Terc(tm1Rdp) mice, null for the terc component of telomerase, the holoenzyme that maintains telomeres, were bred and analyzed. Generational inbreeding of terc-/- mice caused sequential shortening of telomeres. Lung histology from the generation with the shortest telomeres (terc-/- F4) showed alveolar wall thinning and increased alveolar size. Morphometric analysis confirmed a significant increase in mean linear intercept (MLI). terc-/- F4 lung showed normal elastin deposition but had significantly decreased collagen content. Both airway and alveolar epithelial type 1 cells (AEC1) appeared normal by immunohistochemistry, and the percentage of alveolar epithelial type 2 cells (AEC2) per total cell number was similar to wild type. However, because of a decrease in distal lung cellularity, the absolute number of AEC2 in terc-/- F4 lung was significantly reduced. In contrast to wild type, terc-/- F4 distal lung epithelium from normoxia-maintained mice exhibited DNA damage by terminal deoxynucleotidyltransferase (TdT)-mediated dUTP nick end labeling (TUNEL) and 8-oxoguanine immunohistochemistry. Western blotting of freshly isolated AEC2 lysates for stress signaling kinases confirmed that the stress-activated protein kinase (SAPK)/c-Jun NH(2)-terminal kinase (JNK) stress response pathway is stimulated in telomerase-null AEC2 even under normoxic conditions. Expression of downstream apoptotic/stress markers, including caspase-3, caspase-6, Bax, and HSP-25, was also observed in telomerase-null, but not wild-type, AEC2. TUNEL analysis of freshly isolated normoxic AEC2 showed that DNA strand breaks, essentially absent in wild-type cells, increased with each successive terc-/- generation and correlated strongly with telomere length (R(2) = 0.9631). Thus lung alveolar integrity, particularly in the distal epithelial compartment, depends on proper telomere maintenance.