Advances in the elucidation of cystic fibrosis transmembrane regulator (CFTR) function have resulted in a greater understanding of the relationship between the CF gene defect and clinical disease. The clinical phenotype is influenced by the class of mutation and possibly by other modifier genes. CFTR regulates the volume and composition of airways surface liquid, primarily by controlling chloride ion transport. However, CFTR also regulates other membrane channels and transports other molecules which may be important in mucocilary clearance and innate defence mechanisms. CFTR may also modulate the inflammatory response in respiratory epithelial cells and other inflammatory cells through a range of mechanisms. It is apparent that CFTR dysfunction results in a range of effects which may contribute to the clinical phenotype. These may contribute to the development of clinical disease at different stages of the natural history of cystic fibrosis. A greater understanding of the basic defect and its implications is likely to result in novel therapeutic approaches.