The cystic fibrosis transmembrane conductance regulator (CFTR) is expressed in the fetal lung, but during lung development it gradually disappears in cells of future alveolar spaces. Recent studies have implicated the CFTR in fluid transport by the adult alveolar epithelium, but its presence has not been demonstrated directly. This study re-evaluated CFTR expression and activity in the adult pulmonary epithelium by using freshly isolated rat alveolar type II (ATII) cells. CFTR mRNA was detected by semiquantitative polymerase chain reaction on the day of cell isolation but was rapidly reduced by 60% after 24 h of cell culture. This was paralleled by a similar decrease of surfactant protein A expression and alkaline phosphatase staining, markers of the ATII cell phenotype. CFTR expression increased significantly on day 4 in cells grown on filters at the air-liquid interface compared with cells submerged or grown on plastic. Significantly higher CFTR expression was detected in distal lung tissue compared with the trachea. The CFTR was also found at the protein level in Western blot experiments employing lysates of freshly isolated alveolar cells. Whole cell patch-clamp experiments revealed cAMP-stimulated, 5-nitro-2-(3-phenylpropylamino)-benzoate-sensitive Cl⁻ conductance with a linear current-voltage relationship. In cell-attached membrane patches with 100 μM amiloride in pipette solution, forskolin stimulated channels of ∼4 pS conductance. Our results indicate that 50–250 of functional CFTR Cl⁻ channels occur in adult alveolar cells and could contribute to alveolar liquid homeostasis.