During exhalation, the surfactant film of lipids and proteins that coats the alveoli in the lung is compressed to high surface pressures, and can remain metastable for prolonged periods at pressures approaching 70 mN/m. Monolayers of calf lung surfactant extract (CLSE), however, collapse in vitro, during an initial compression at approximately 45 mN/m. To gain information on the source of this discrepancy, we investigated how monolayers of CLSE collapse from the interface. Observations with fluorescence, Brewster angle, and light scattering microscopies show that monolayers containing CLSE, CLSE-cholesterol (20%), or binary mixtures of dipalmitoyl phosphatidylcholine(DPPC)-dihydrocholesterol all form bilayer disks that reside above the monolayer. Upon compression and expansion, lipids flow continuously from the monolayer into the disks, and vice versa. In several respects, the mode of collapse resembles the behavior of other amphiphiles that form smectic liquid-crystal phases. These findings suggest that components of surfactent films must collapse collectively rather than being squeezed out individually.