The epithelial lining of the airway tract and allergen-specific IgE are considered essential controllers of inflammatory responses to allergens. The human low affinity IgE receptor, CD23 (FcɛRII), is capable of transporting IgE or IgE-allergen complexes across the polarized human airway epithelial cell (AEC) monolayer in vitro. However, it remains unknown whether the CD23-dependent IgE transfer pathway in AECs initiates and facilitates allergic inflammation in vivo, and whether inhibition of this pathway attenuates allergic inflammation. To this end, we show that in wild-type (WT) mice, epithelial CD23 transcytosed both IgE and ovalbumin (OVA)-IgE complexes across the airway epithelial barrier, whereas neither type of transcytosis was observed in CD23 knockout (KO) mice. In chimeric mice, OVA sensitization and aerosol challenge of WT/WT (bone-marrow transfer from the WT to WT) or CD23KO/WT (CD23KO to WT) chimeric mice, which express CD23 on radioresistant airway structural cells (mainly epithelial cells) resulted in airway eosinophilia, including collagen deposition and a significant increase in goblet cells, and increased airway hyperreactivity. In contrast, the absence of CD23 expression on airway structural or epithelial cells, but not on hematopoietic cells, in WT/CD23KO (the WT to CD23KO) chimeric mice significantly reduced OVA-driven allergic airway inflammation. In addition, inhalation of the CD23-blocking B3B4 antibody in sensitized WT mice before or during airway challenge suppressed the salient features of asthma, including bronchial hyperreactivity. Taken together, these results identify a previously unproven mechanism in which epithelial CD23 plays a central role in the development of allergic inflammation. Further, our study suggests that functional inhibition of CD23 in the airway is a potential therapeutic approach to inhibit the development of asthma.