Lipopolysaccharide (LPS) serves as the interface between gram-negative bacteria (GNB) and the innate immune response in respiratory epithelial cells (REC). Herein, we describe a novel biological role of LPS that permits GNB to persist in the respiratory tract through inducing CFTR and mucociliary dysfunction. LPS reduced cystic fibrosis transmembrane conductance regulater (CFTR)-mediated short-circuit current in mammalian REC in Ussing chambers and nearly abrogated CFTR single channel activity (defined as forskolin-activated Cl- currents) in patch clamp studies, effects of which were blocked with toll-like receptor (TLR)-4 inhibitor. Unitary conductance and single-channel amplitude of CFTR were unaffected, but open probability and number of active channels were markedly decreased. LPS increased cytoplasmic and mitochondrial reactive oxygen species resulting in CFTR carbonylation. All effects of exposure were eliminated when reduced glutathione was added in the medium along with LPS. Functional microanatomy parameters, including mucociliary transport, in human sinonasal epithelial cells in vitro were also decreased, but restored with co-incubation with glutathione or TLR-4 inhibitor. In vivo measurements, following application of LPS in the nasal cavities showed significant decreases in transepithelial Cl- secretion as measured by nasal potential difference (NPD) – an effect that was nullified with glutathione and TLR-4 inhibitor. These data provide definitive evidence that LPS-generated reactive intermediates downregulate CFTR function in vitro and in vivo which results in cystic fibrosis-type disease. Findings have implications for therapeutic approaches intent on stimulating Cl- secretion and/or reducing oxidative stress to decrease the sequelae of GNB airway colonization and infection.