The pulsating bubble surfactometer (PBS) is often used for the in vitro characterization of exogenous lung surfactant replacements and lung surfactant components. However, the commercially available PBS is not able to dynamically track bubble size and shape. The PBS therefore does not account for bubble growth or elliptical bubble shape that frequently occur during device use. More importantly, the oscillatory volume changes of the pulsating bubble are different than that assumed by the software of the commercial unit. This leads to errors in both surface area and surface tension measurements. We have modified a commercial PBS through the addition of an image acquisition system, allowing real-time determination of bubble size and shape, and hence the accurate tracking of surface area and surface tension. Compressionexpansion loops obtained with the commercially available PBS software were compared to those provided by the image analysis system for DPPC, Infasurf^TM, and Tanaka lipids (DPPC:POPG: PA, 68:22:9) at concentrations of 0.1 and 1.0 mg/ml and at frequencies of 1 and 20 cycles/min. While minimum surface tension as determined by the image analysis system is similar to that measured by the commercially available software, the maximum surface tension and the shapes of the interfacial area/surface tension loops are quite different. Differences are attributable to bubble drift, non-sinusoidal volume changes, and variable volume excursions seen using the modified system, but neglected by the original system. Image analysis reveals that the extent of loop hysteresis is greatly overestimated by the commercial device and that an apparent, rapid increase in surface tension upon film expansion seen in PBS loops is not observed with the image analysis system. The modified PBS system reveals new dynamic characteristics of lung surfactant preparations that have not previously been reported.