The mature pulmonary epithelium forms a continuous lining to the airspace. Recent data suggest that this specialized epithelium may also contribute to host defence via interactions with inflammatory cells. Pulmonary epithelial cells can serve as part of the local immune system, providing structures and functions crucial for the maintenance of normal pulmonary function. This article will briefly review the morphology and development of the pulmonary epithelial cells, their function with regard to host defence, alterations of the pulmonary epithelium associated with airway diseases, and potential therapeutic implications for the treatment of respiratory diseases.