Epithelial cells produce molecules that alter the growth and differentiation of mesenchymal cells, trigger the adhesion to endothelial cells and recruitment of inflammatory leukocytes, and regulate the activation of resident and infiltrating inflammatory cells. Recently, it has become clear that the airway epithelium also participates in innate immune responses. Accumulating evidence suggests that epithelial products such as complement, collectins, lysozyme, lactoferrin, secretory leukocyte protease inhibitor, and defensins can lead to localized destruction of microorganisms. While suppressing systemic adaptive immune responses, glucocorticoids exert little or no inhibitory effect on the ability of the epithelium to express these antimicrobial substances and, in some cases, may even elevate their production. Inhaled glucocorticoids generally profoundly inhibit epithelial cell expression of genes of inflammation, including chemokines, cytokines, and enzymes. Glucocorticoids may enhance the sensitivity of the epithelial surface to Toll-like receptor ligands, and they have been found to induce the expression of surfactant proteins A and D in several in vitro and in vivo model systems. Supporting the concept that glucocorticoids enhance innate immunity while suppressing adaptive immunity, these drugs enhance the survival and/or function of neutrophils and alveolar macrophages but induce the apoptosis of airway dendritic cells.