To investigate the mechanism by which airway epithelium modulates the effect of drugs on respiratory smooth muscle, a study was conducted to compare the reactivity of perfused trachea to extraluminally (EL) and intraluminally (IL) applied histamine and isoproterenol, and to assess the effect of epithelium removal. Tracheas were isolated from male English-short-hair-guinea-pigs and mounted in a perfusion holder and organ chamber. Agonists were added in stepwise increasing cumulative concentrations, and EL and/or IL concentration response curves were determined. Trachealis response was determined by measuring changes in pressure gradient. Acetylcholine or carbachol concentration response curves were determined after the addition of physostigmine. The effect of corticosterone and indomethacin on reactivity was also measured. Intact trachea preparations in the IL bath exhibited delayed responses to the agonists relative to those after EL addition. Sensitivity reductions were evident in the second of two consecutive EL methacholine curves. Carbachol, methacholine, and acetylcholine were significantly more potent under EL conditions. The authors conclude that the epithelium acts as a diffusion barrier that reduces the reactivity to mucosally applied drugs, and also that prostanoids, catecholamines, and other factors inhibit the response to mucosally applied contractile agonists.