The cystic fibrosis transmembrane conductance regulator (CFTR) is a cyclic AMP-activated chloride channel that is encoded by the gene that is defective in cystic fibrosis. This ion channel resides at the luminal surfaces and in endosomes of epithelial cells that line the airways, intestine, and a variety of exocrine glands. In this article we discuss current hypotheses regarding how CFTR functions as a regulated ion channel and how CF mutations lead to disease. We also evaluate the emerging notion that CFTR is a multifunctional protein that is capable of regulating epithelial physiology at several levels, including the modulation of other ion channels and the regulation of intracellular membrane traffic. Elucidating the various functions of CFTR should contribute to our understanding of the pathology in cystic fibrosis, the most common lethal genetic disorder among Caucasians.