A balance between alveolar liquid absorption and secretion is critical for maintaining optimal alveolar subphase liquid height and facilitating gas exchange in the alveolar space. However, the role of cystic fibrosis transmembrane regulator protein (CFTR) in this homeostatic process has remained elusive. Using a newly developed porcine model of cystic fibrosis, in which CFTR is absent, we investigated ion transport properties and alveolar liquid transport in isolated type II alveolar epithelial cells (T2AECs) cultured at the air-liquid interface. CFTR was distributed exclusively to the apical surface of cultured T2AECs. Alveolar epithelia from CFTR(-/-) pigs failed to increase liquid absorption in response to agents that increase cAMP, whereas cAMP-stimulated liquid absorption in CFTR(+/-) epithelia was similar to that in CFTR(+/+) epithelia. Expression of recombinant CFTR restored stimulated liquid absorption in CFTR(-/-) T2AECs but had no effect on CFTR(+/+) epithelia. In ex vivo studies of nonperfused lungs, stimulated liquid absorption was defective in CFTR(-/-) alveolar epithelia but similar between CFTR(+/+) and CFTR(+/-) epithelia. When epithelia were studied at the air-liquid interface, elevating cAMP levels increased subphase liquid height in CFTR(+/+) but not in CFTR(-/-) T2AECs. Our findings demonstrate that CFTR is required for maximal liquid absorption under cAMP stimulation, but it is not the rate-limiting factor. Furthermore, our data define a role for CFTR in liquid secretion by T2AECs. These insights may help to develop new treatment strategies for pulmonary edema and respiratory distress syndrome, diseases in which lung liquid transport is disrupted.