Rat tracheal epithelial (RTE) cells, plated at low density on collagen gel-coated membranes, differentiate into a mucociliary epithelium when cultured at an air—liquid interface (ALI). However, when RTE cells are cultured submerged in media, ciliated cell differentiation is drastically reduced. This study examined possible mechanisms for the inhibition of ciliated cell differentiation by submersion. Ciliated cell differentiation was measured using a monoclonal antibody specific for rat ciliated cells. Removing growth stimulatory compounds from both the basal and apical media increased ciliated cell differentiation in submerged cultures, indicating that submersion inhibits, but does not prevent, ciliogenesis. However, the effect of submersion was independent of the composition of the apical media. The depth of apical fluid was important, with depths ≥1 mm causing almost complete inhibition of ciliated cell differentiation, while a depth of 0.5 mm allowed significant ciliogenesis. Submersion appeared to block ciliated cell differentiation at an early step, because ciliated cell development required several days following creation of an ALI. Once ciliogenesis was initiated in ALI cultures, submersion did not reverse or inhibit the development off ciliated cells. These studies have provided new information on the inhibition of ciliated cell differentiation by fluid submersion.