Hypercapnia (elevated CO(2) levels) occurs as a consequence of poor alveolar ventilation and impairs alveolar fluid reabsorption (AFR) by promoting Na,K-ATPase endocytosis. We studied the mechanisms regulating CO(2)-induced Na,K-ATPase endocytosis in alveolar epithelial cells (AECs) and alveolar epithelial dysfunction in rats. Elevated CO(2) levels caused a rapid activation of AMP-activated protein kinase (AMPK) in AECs, a key regulator of metabolic homeostasis. Activation of AMPK was mediated by a CO(2)-triggered increase in intracellular Ca(2+) concentration and Ca(2+)/calmodulin-dependent kinase kinase-beta (CaMKK-beta). Chelating intracellular Ca(2+) or abrogating CaMKK-beta function by gene silencing or chemical inhibition prevented the CO(2)-induced AMPK activation in AECs. Activation of AMPK or overexpression of constitutively active AMPK was sufficient to activate PKC-zeta and promote Na,K-ATPase endocytosis. Inhibition or downregulation of AMPK via adenoviral delivery of dominant-negative AMPK-alpha(1) prevented CO(2)-induced Na,K-ATPase endocytosis. The hypercapnia effects were independent of intracellular ROS. Exposure of rats to hypercapnia for up to 7 days caused a sustained decrease in AFR. Pretreatment with a beta-adrenergic agonist, isoproterenol, or a cAMP analog ameliorated the hypercapnia-induced impairment of AFR. Accordingly, we provide evidence that elevated CO(2) levels are sensed by AECs and that AMPK mediates CO(2)-induced Na,K-ATPase endocytosis and alveolar epithelial dysfunction, which can be prevented with beta-adrenergic agonists and cAMP.