The hydrophobic pulmonary surfactant protein SP-C has been isolated from porcine lung surfactant, and it has been incorporated into monolayers of dipalmitoylphosphatidylcholine (DPPC). The monolayers, which contained 1 mol% of a fluorescently-labeled phosphatidylcholine, were observed under various states of compression in an epifluorescence surface balance. SP-C altered the packing arrangements of DPPC in the monolayer, causing the production of many more, smaller condensed lipid domains in its presence than in its absence.