This study describes an experimental model of smoke inhalation injury in sheep in which the same pathophysiologic alterations occur as with clinical inhalation injury in man. Diffuse pulmonary mucosal sloughing with atelectasis and emphysema with concomitant development of pulmonary edema results in a decrease in arterial oxygen and progressive pulmonary deterioration which results in a substantial mortality. Increased pulmonary edema fluid is shown to be caused by an increased microvascular permeability to protein with pulmonary lymph and tracheobronchial fluid, a filtrate of plasma. Concomitant with this increase in microvascular permeability is an influx of neutrophils, release of proteolytic enzymes and an identified presence of the metabolite of the prostanoid thromboxane A2 which are postulated as contributors to the progressive pulmonary dysfunction post inhalation injury.