Cloning of the cystic fibrosis (CF) gene through genetic linkage analysis has led to new discoveries concerning the function of ion channels and disease mechanisms. Current understanding of CF indicates that epithelial cells from CF patients have reduced Cl- permeability, which impairs fluid and electrolyte secretion and results in luminal dehydration. There is also evidence that the cystic fibrosis transmembrane conductance regulator (CFTR) is the cyclic AMP-dependent ion channel whose activation is defective in CF cells. The CFTR is composed of 1480 amino acids that reveal a structural homology to a family of transport proteins termed the transport ATPases. The nucleotide-binding domains of CFTR are the locus of many disease-causing mutations; the common mutation in CFTR is deletion of a phenylalanine at position 508. In addition, CFTR contains a regulatory domain with consensus sites for phosphorylation by protein kinases. Reversible phosphorylation is a regulatory feature of the signal transduction pathway in which the CF defect lies. The phosphorylated channel requires the continuous presence of ATP, whether in the form of ATP binding or hydrolysis, to maintain channel activity. Channel activation requiring ATP can be inhibited by simultaneous presence of ADP, showing that this nucleotide diphosphate competes with ATP for activation. Studies of mutant CFTR expression indicate that at least two basic mechanisms are responsible for the CF phenotype, including CFTR protein dysfunction and inappropriate protein targeting. If mechanisms for bringing this partially functional protein to the plasma membrane can be found, the airway disease of the vast majority of patients with CF could be improved.