Epithelial injury and bronchial hyperresponsiveness are commonly associated with airway disease, and are widely considered to occur as the result of inflammatory changes in the airway wall. Mechanistically, the airway epithelium may influence the sensitivity of the airways to provocative stimuli through its primary function as a cellular barrier between the air and the interstitium, or by liberating a variety of bronchoactive mediators, e.g., lipoxygenase and cyclooxygenase products, nitric oxide, and an epithelium-derived relaxing factor (EpDIF). Much attention has focused on the latter function of the epithelium, particularly the putative EpDIF, which has an action considered to be analogous to that of endothelium-derived relaxing factor in blood vessels. The modulation of airway calibre by the epithelium has recently been investigated in vitro using tubular preparations of bronchi, where removal of, or damage to, the epithelium increases the sensitivity to agonists by several orders of magnitude. This contrasts with the effect of removing the epithelium on strips or rings of airway wall, where the increase in sensitivity is small and rather variable, but this has been the primary observation for proposing a putative EpDIF. This review evaluates the barrier or protective function of the airway epithelium and the major role it plays in the modulation of airway responsiveness. A role of a putative EpDIF seems, at best, to be of minor functional significance.