In the canine tracheal epithelium, exposure to cotton bracts extract (CBE) produces significant decreases in transepithelial potential difference (YIms), short-circuit current (Isc), and tissue resistance (Rt) and a significant increase in mannitol flux, a measure of the paracellular pathway. Of the two major compounds in CBE, tannin produced a significant decrease in IYms and Isc but had no effect on the canine tracheal epithelium. We hypothesized that while endotoxin alone might have no effect on the airway epithelium, endotoxin might activate alveolar macrophages and produce mediator release which in turn might have a significant effect on the airway epithelium. Supernates from macrophages incubated at 37 C for 90 minutes alone and with 250 µ/ml endotoxin were added to the mucosal bath of canine tracheal epithelium mounted in Ussing chambers. Control supernates from macrophages lysed to release all preformed mediators and solutions containing 250 µg/ml endotoxin were also studied. Endotoxin alone had no effect. In contrast, endotoxin-exposed alveolar macrophages and lysed macrophages produced significant increases in IYms and Isc while macrophages alone had no significant effect. The effect of endotoxin-exposed alveolar macrophages was greater than the response to lysed macrophages. These data demonstrate that while endotoxin alone has no effect on the airway epithelium, endotoxin does cause mediator release from cells within the airway and mediators produce significant effects on the airway epithelium. These observations are in contrast to those observed with CBE and suggest that complex changes occur in the function of the airway epithelium in response to exposure to the many different compounds contained in cotton bracts extract.