Acute hypoxia in the intact animal and in cultured endothelial cells has been shown to be associated with a decrease in conversion of angiotensin I (AI) to angiotensin II (AII). Alterations in capillary surface and in contact time resulting from hemodynamic changes have been shown to influence the rate of pulmonary AI conversion. The dependency of AI conversion on hemodynamics complicates the interpretation of experiments showing changes in AI conversion in intact animals. We studied the effect of acute hypoxia on AI conversion in the isolated rat lung perfused at constant flow without recirculation of perfusate. Three levels of oxygenation were produced by ventilating lungs and equilibrating perfusate with a range of hypoxic gas mixtures. AI (1 μg) was injected into the pulmonary artery, and the effluent was collected for measurement of AI and All. Instead of the expected hypoxic inhibition, percent conversion of AI to All increased slightly but significantly from 69.3 ± 3.1 (mean ± S.E.M.) at normal oxygenation to 74.4 ± 3.0 at moderate hypoxia (P < 0.005, paired t) and to 73.5 ± 3.9 at severe hypoxia (P < 0.01, paired t). Decreasing mean transit time of substrate through the lung (by increasing perfusate flow rate from 5 to 20 ml/min) resulted in a significant decrease in conversion of AI from 88.7 ± 2.9 to 73.4 ± 2.1% (P < 0.001, paired t). These data confirm the effect of contact time on the rate of AI conversion in the lungs. The isolated rat lung preparation does not exhibit the phenomenon of hypoxia-induced inhibition of AI conversion. The authors speculate that hypoxia-induced inhibition of AI conversion in vivo may be secondary to the effects of hypoxia on hemodynamics. © 1982.