Twelve open-chest mongrel puppies, 8-10 wk old, were studied to localize the site of action of inhaled methacholine within the lungs. Six puppies were challenged with methacholine aerosols and six were challenged with an equal number of nebulizations of normal saline (control group). Pulmonary mechanics were measured during mechanical ventilation and after midexpiratory flow interruptions. Alveolar pressure was measured to allow the partitioning of pulmonary mechanics into airway and tissue components. Good matching between airway opening and alveolar pressures was seen throughout the study. After methacholine challenge, lung resistance increased fivefold. Increases in airway resistance and in the parameters reflecting tissue viscoelastic properties contributed to this increase in lung resistance. Dynamic lung elastance also increased threefold. The response of the methacholine group was statistically different from that of the control group. These data indicate that both the airways and pulmonary parenchyma contribute to the response to inhaled methacholine in 8- to 10-wk-old puppies.