Pneumonia and lung injury are hallmarks of early-onset neonatal group B streptococcal (GBS) infections. Production of a β-hemolysin/cytolysin (β-h/c) encoded by the cylE gene is associated with GBS virulence in vivo. To elucidate the contribution of the β-h/c toxin to lung injury, the interactions of GBS wild-type strains and isogenic cylE mutants with A549 lung epithelial cells were examined. Compared with wild-type GBS strains, cylE mutants did not produce cytolytic injury, even at high inocula, and exhibited decreased cellular invasion. Additionally, cylE mutants induced less A549 cell release of the neutrophil chemoattractant interleukin (IL)–8. GBS invasion and IL-8 induction were significantly reduced in the presence of dipalmotyl phosphatidylcholine, a major constituent of lung surfactant and a known inhibitor of β-h/c activity. These data indicate that the GBS β-h/c contributes to invasion and immune activation of lung epithelial cells and may represent a multifunctional virulence factor in the early pulmonary stages of GBS infection