The lung great alveolar cell in mammals, including man, produces phosphatidylcholine aggregates known as lung multilamellar bodies (LMB) that act as a surfactant to provide the critical surface tension properties of the alveolus. In an aqueous environment, phosphatidylcholine exists as lyotropic lamellar liquid crystalline bilayers organized as spherical or toroidal aggregates up to about 100 bilayers in diameter. The lung multilamellar bodies appear morphologically identical with in vitro natural and synthetic dispersions of lyotropic lamellar liposomes and include a population of liquid crystalline defects such as disclinations and edge dislocations. The morphology and interactions of the defects are explained by the continuum theory of liquid crystals. We report the first observations with molecular resolution of the structure and interactions of disclinations and edge dislocations in lamellar phases.