Airway epithelial cells carry out their physiologic role in part by activating phospholipase-fatty acid oxygenation pathways. Recent discoveries include the facts that (a) airway epithelial cells contain abundant stores of fatty acid substrates, including arachidonic acid, for oxygenation, (b) the cells release arachidonic acid upon activation of specific phospholipases, (c) the cells contain novel cyclooxygenases and lipoxygenases at high levels relative to other cell types, and (d) some of the arachidonate metabolites have potent biologic effects on airway end organs such as smooth muscle, nerves, mucus glands, and epithelial cells themselves. Studies of arachidonate metabolism in airway epithelial cells have often been done on a heterogeneous cell population of basal, ciliated, and goblet cells, so information on individual cell types and alterations during cellular differentiation is still poorly defined. Potential cell-cell interaction via transcellular synthesis of eicosanoids also requires further study. Each of these aims would be aided by the use of cultured airway epithelial cells, but the culture system has proven problematic in preserving the oxygenation phenotype of the original tissue. The same access of the epithelial cells to inhaled agents will permit lipid-modifying drugs to be delivered to them, and much of this therapeutic potential is still unexplored. Therefore, determining the factors that regulate arachidonic acid metabolism in airway epithelial cells is still a fundamental goal for unraveling the role of arachidonate products in airway function and for altering eicosanoid production in the airway.