BACKGROUND The effect of chronic high altitude hypoxia (CHAH) in the juxta-alveolar region near the air-blood interface is unknown because of the experimental inaccessibility of this region. OBJECTIVE To examine primary cultures of digested juxta-alveolar smooth muscle cells for hypoxia-induced changes. METHODS Smooth Muscle Cells (SMCs) obtained by dispase digestion of the extreme lung parenchyma were used to study the effect of CHAH in the juxta-alveolar region and foetal and maternal cells were compared. Pulmonary venous SMCs were also obtained from dissected 5th to 7th generation levels pulmonary veins (<0.5 mm). Fluorescence tagged antibodies against alpha smooth muscle actin (alpha SMA) and calponin respectively were used as markers to identify cellular structural differences by routine immunohistochemistry. Comparison of the functional integrity of the cells was made using their growth profiles obtained by radiolabeled thymidine incorporation and liquid scintillation counting. RESULTS Marked differences were seen in juxta-alveolar SMCs obtained by digestion of extreme lung parenchyma of hypoxic sheep. Hypoxic adult sheep cells showed increased filamentation. Hypoxic foetal sheep cells showed internal restructuring and disorganization of both alpha-SMA and calponin filaments. The growth profiles of juxta-alveolar SMCs showed that the hypoxia-affected cells of both the foetus and adult sheep had a fast initial growth rate peaking at 48h while their normoxic equivalents had a steadier growth rate peaking at 72h. Hypoxia-affected cells showed contact inhibition at ~50% subconfluence and apoptosis by 48h. CONCLUSION Chronic high altitude hypoxia causes both phenotypical and functional changes in pulmonary smooth muscle cells near the air/blood interface.