This review is focused on the evolution and function of alveolar proteins. The lung faces physical and environmental challenges, due to changing pressures/volumes and foreign pathogens, respectively. The pulmonary surfactant system is integral in protecting the lung from these challenges via two groups of surfactant proteins - the small molecular weight hydrophobic SPs, SP-B and -C, that regulate interfacial adsorption of the lipids, and the large hydrophilic SPs, SP-A and -D, which are surfactant collectins capable of inhibiting foreign pathogens. Further aiding pulmonary host defence are non-surfactant collectins and antimicrobial peptides that are expressed across the biological kingdoms. Linking to the first symposium session, which emphasised molecular structure and biophysical function of surfactant lipids and proteins, this review begins with a discussion of the role of temperature and hydrostatic pressure in shaping the evolution of SP-C in mammals. Transitioning to the role of the alveolus in innate host defence we discuss the structure, function and regulation of antimicrobial peptides, the defensins and cathelicidins. We describe the recent discovery of novel avian collectins and provide evidence for their role in preventing influenza infection. This is followed by discussions of the roles of SP-A and SP-D in mediating host defence at the alveolar surface and in mediating inflammation and the allergic response of the airways. Finally we discuss the use of animal models of lung disease including knockouts to develop an understanding of the role of these proteins in initiating and/or perpetuating disease with the aim of developing new therapeutic strategies.