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The pulmonary delivery of peptide drugs involves an understanding of the barriers to absorption which include poor permeability, potential activation of alveolar macrophages (AMs) and enzymatic degradation. The aim of the study is to develop methodologies to study the relative nature of respiratory tract epithelia. The dynamics of its regulation are also studied for examining the feasibility of achieving reversible increases in paracellular permeability. Transepithelial electrical resistance (TER) measurements coupled with flux studies of C-14 Mannitol were conducted employing isolated epithelial tissue from rabbits for estimation of comparative permeabilities. The dynamics of paracellular permeability was studied employing 0.1 mM cytochalasin B, 10 {dollar}\\mu{dollar}M A23187, and HEPES without calcium plus 1 mM EGTA on rabbit tracheal epithelium. 2{dollar}\\sp\\prime,7\\sp\\prime{dollar}-dichlorofluorescin diacetate (DCFHDA) was employed as a membrane-permeant oxidative probe to study activation of AM by bleomycin and its amelioration by taurine. Simultaneous studies of the effect on intracellular calcium was also conducted. Enzymatic degradation of despyroglutamyl-LHRH was studied by employing lung microsomal preparations and AM. The degradation profile obtained by treatment with 16 nM phorbol myristate acetate (PMA) was compared with control AM. The barrier properties of respiratory epithelia was found to be comparable to that of the G.I. tract. Only EGTA and cytochalasin B exerted a reversible increase in the paracellular permeability. Taurine exerted an inhibitory effect on the increase in intracellular oxidation and calcium rise on exposure to 4 {dollar}\\mu{dollar}g/ml bleomycin. The LHRH analogue was found to undergo degradation to yield LHRH{dollar}\\sb{lcub}6-10{rcub}{dollar} LHRH{dollar}\\sb{lcub}7-10{rcub}{dollar} on incubation with lung microsomal preparations. The formation of LHRH{dollar}\\sb{lcub}7-10{rcub}{dollar} was not seen on incubation with AM. Treatment of AM with 16 nM PMA significantly increased the degradation of despyroglutamyl-LHRH. Use of TER measurements and concurrent flux indicators can yield information on feasibility of increasing the paracellular permeability safely and transiently in order to enhance absorption. DCFHDA can be used to screen possible activation of AM by peptide drugs and formulation ingredients. Since LHRH{dollar}\\sb{lcub}6-10{rcub}{dollar} was found to be a major degradation product, LHRH analogues designed to resist hydrolysis around the Tyr{dollar}\\sp5{dollar}-Gly{dollar}\\sp6{dollar} bond should yield superior bioavailability by this route.