Cystic fibrosis (CF), the most prevalent, fatal genetic disorder in the Caucasian population, is caused by mutations of CF transmembrane conductance regulator (CFTR). The mutations of this chloride channel alter the transport of chloride and associated liquid and thereby impair lung defenses. Patients typically succumb to chronic bacterial infections and respiratory failure. Restoration of the abnormal CFTR function to CF airway epithelium is considered the most direct way to treat the disease. In this report, we explore the potential of adult stem cells from bone marrow, referred to as mesenchymal or marrow stromal stem cells (MSCs), to provide a therapy for CF. We found that MSCs possess the capacity of differentiating into airway epithelia. MSCs from CF patients are amenable to CFTR gene correction, and expression of CFTR does not influence the pluripotency of MSCs. Moreover, the CFTR-corrected MSCs from CF patients are able to contribute to apical Cl- secretion in response to cAMP agonist stimulation, suggesting the possibility of developing cell-based therapy for CF. The ex vivo coculture system established in this report offers an invaluable approach for selection of stem-cell populations that may have greater potency in lung differentiation.