The human respiratory tract is covered with airway surface liquid (ASL) that is essential for lung defense and normal airway function. The quantity and composition of ASL is regulated by active ion transport across the airway epithelium. Abnormal electrolyte transport produces changes in ASL volume and composition, inhibits mucociliary clearance and leads to chronic infection of airway surfaces, as is evident in cystic fibrosis. Agonists that induce intracellular increases in cAMP or Ca2+ are generally associated with electrolyte secretion. While these mechanisms have been studied in detail for many years, modulation of ion channels by nitric oxide (NO) has emerged only recently as a significant determinant of ion channel function. NO is a physiological regulator of transepithelial ion movement and alterations of its generation and action may play an important role in the pathogenesis of lung disorders characterized by hypersecretion of ASL. This review presents the current understanding of regulation of airway epithelial ion channels by NO and attempts to highlight the importance of this regulation for lung defense.