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A common pathology associated with these diseases is reduced mucociliary clearance, a defense mechanism involving the coordinated transport of salt, water, and mucus by the bronchial epithelium, ultimately leading to retention of pathogens and particles in the airways and to further disease progression. In the present study we investigated the role of hydrocortisone (HC) in differentiation and development of the ion transport phenotype of normal human bronchial epithelial cells under air-liquid interface conditions. Normal human bronchial epithelial cells differentiated in the absence of HC (HC0) showed significantly less benzamil-sensitive short-circuit current than controls, as well as a reduced response after stimulation with the selective \u03b2<jats:sub>2<\/jats:sub>-adrenergic receptor agonist salbutamol. Apical membrane localization of epithelial Na<jats:sup>+<\/jats:sup> channel \u03b1-subunits was similarly reduced in HC0 cells compared with controls, supporting a role of HC in the trafficking and density of Na<jats:sup>+<\/jats:sup> channels in the plasma membrane. Additionally, glucocorticoid exposure during differentiation regulated the transcription of cystic fibrosis transmembrane conductance regulator and \u03b2<jats:sub>2<\/jats:sub>-adrenergic receptor mRNAs and appeared to be necessary for the expression of cystic fibrosis transmembrane conductance regulator-dependent anion secretion in response to \u03b2<jats:sub>2<\/jats:sub>-agonists. HC had no significant effect on surface cell differentiation but did modulate the expression of mucin mRNAs. 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