Loss or dysfunction of the cystic fibrosis (CF) transmembrane conductance regulator (CFTR) leads to impairment of airway mucus transport and to chronic lung diseases resulting in progressive respiratory failure. Nicotinic acetylcholine receptors (nAChRs) bind nicotine and nicotine-derived nitrosamines and thus mediate many of the tobacco-related deleterious effects in the lung. Here we identify α7 nAChR as a key regulator of CFTR in the airways. The airway epithelium in α7 knockout mice is characterized by a higher transepithelial potential difference, an increase of amiloride-sensitive apical Na(+) absorption, a defective cAMP-dependent Cl(-) conductance, higher concentrations of Na(+), Cl(-), K(+), and Ca(2+) in secretions, and a decreased mucus transport, all relevant to a deficient CFTR activity. Moreover, prolonged nicotine exposure mimics the absence of α7 nAChR in mice or its inactivation in vitro in human airway epithelial cell cultures. The functional coupling of α7 nAChR to CFTR occurs through Ca(2+) entry and activation of adenylyl cyclases, protein kinase A, and PKC. α7 nAChR, CFTR, and adenylyl cyclase-1 are physically and functionally associated in a macromolecular complex within lipid rafts at the apical membrane of surface and glandular airway epithelium. This study establishes the potential role of α7 nAChR in the regulation of CFTR function and in the pathogenesis of smoking-related chronic lung diseases.