Surfactant protein B is a small homodimeric protein that is found tightly associated with surfactant lipids in the alveolar space. In this review, we discuss the actions of SP-B on phospholipid membranes using information predominantly obtained from model membrane systems. We try to correlate these model actions with current concepts of SP-B structure and proposed biological functions. These functions may include critical roles in the intracellular assembly of surfactant through a role in lamellar body organogenesis, the structural rearrangement of secreted surfactant lipids into tubular myelin, and the subsequent rapid insertion of secreted surfactant phospholipids into the surface film itself. The relevance of SP-B to human biology is emphasized by the fatal respiratory distress that is associated with a genetic deficiency of SP-B and the important role of SP-B in certain exogenous surfactant formulations in wide clinical use.