In August 2000, NIOSH investigated the development of bronchiolitis obliterans following inhalation of the butter flavoring, diacetyl, in employees at a popcorn manufacturing plant. Rats exposed to diacetyl vapor for 6 h developed diacetyl dose-dependent epithelial damage of the upper airways 18 h after exposure. Nevertheless, diacetyl inhalation did not result in hyperreactivity to methacholine (MCh) both in vivo (inhaled MCh aerosol) and in vitro (isolated, perfused trachea), despite damage to the epithelium. In order to investigate the direct effects of diacetyl on airway epithelium, we examined ion transport of human air-interface, cultured epithelial cells following diacetyl exposure. We hypothesized that altered epithelial ion transport may be among the earliest events associated with the onset of diacetyl toxicity. Using an exposure system designed for cultured cells, cells were exposed for 6 h to diacetyl vapors (100, 200, 300, 360 ppm). Eighteen hours after exposure, cells were placed into an Ussing chamber to measure transepithelial potential difference (Vt). The results demonstrated that, whereas inhalation of diacetyl had no effect in vivo or in vitro, all concentrations of diacetyl abolished Vt in cultured cells. Our results indicate that diacetyl causes substantial damage to airway epithelium in culture at exposure concentrations that do not alter reactivity of the airways in vivo or in vitro.