Rab27 small GTPases regulate secretion and movement of lysosome-related organelles such as T cell cytolytic granules and platelet-dense granules. Previous studies indicated that Rab27a and Rab27b are expressed in the murine lung suggesting that they regulate secretory processes in the lung. Consistent with those studies, we found that Rab27a and Rab27b are expressed in cell types that contain secretory granules: alveolar epithelial type II (AEII) and Clara cells. We then used Rab27a/Rab27b double knockout (DKO) mice to examine the functional consequence of loss of Rab27 proteins in the murine lung. Light and electron microscopy revealed a number of morphological changes in lungs from DKO mice when compared with those in control animals. In aged DKO mice we observed atrophy of the bronchiolar and alveolar epithelium with reduction of cells numbers, thinning of the bronchiolar epithelium and alveolar walls, and enlargement of alveolar airspaces. In these samples we also observed increased numbers of activated foamy alveolar macrophages and granulocyte containing infiltrates together with reduction in the numbers of Clara cells and AEII cells compared with control. At the ultrastructural level we observed accumulation of cytoplasmic membranes and vesicles in Clara cells. Meanwhile, AEII cells in DKO accumulated large mature lamellar bodies and lacked immature/precursor lamellar bodies. We hypothesize that the morphological changes observed at the ultrastructural level in DKO samples result from secretory defects in AEII and Clara cells and that over time these defects lead to atrophy of the epithelium.