Keratinocyte growth factor (KGF) regulates several functions in adult and developing lung epithelia; it causes proliferation, stimulates secretion of fluid and electrolytes, enhances repair, and may minimize injury. To gain insight into the molecular processes influenced by KGF, we applied KGF to primary cultures of well-differentiated human airway epithelia and used microarray hybridization to assess the abundance of gene transcripts. Of 7,069 genes tested, KGF changed expression levels of 910. Earlier studies showed that KGF causes epithelial proliferation, and as expected, treatment altered expression of numerous genes involved in cell proliferation. We found that KGF stimulated transepithelial Cl(-) transport, but the number of cystic fibrosis (CF) transmembrane conductance regulator (CFTR) transcripts fell. Although transcripts for ClC-1 and ClC-7 Cl(-) channels increased, KGF failed to augment transepithelial Cl(-) transport in CF epithelia, suggesting that KGF-stimulated Cl(-) transport in differentiated airway epithelia depends on the CFTR Cl(-) channel. Interestingly, KGF decreased transcripts for many interferon (IFN)-induced genes. IFN causes trafficking of Stat dimers to the nucleus, where they activate transcription of IFN-induced genes. We found that KGF prevented the IFN-stimulated trafficking of Stat1 from the cytosol to the nucleus, suggesting a molecular mechanism for KGF-mediated suppression of the IFN-signaling pathway. These results suggest that in addition to stimulating proliferation and repair of damaged airway epithelia, KGF stimulates Cl(-) transport and may dampen the response of epithelial cells to inflammatory mediators.