The purpose of this study was to evaluate the effect of inhaled corticosteroid budesonide in altering antibacterial and protein secretory properties of airway epithelial cell line Calu-3 with reduced cystic fibrosis transmembrane conductance regulator (CFTR) function. Calu-3 cells with reduced CFTR function (Calu-3A) was produced by stable transfection of cells with antisense CFTR oligonucleotides. The antibacterial activity and protein secretions were examined using the apical surface fluid (ASF) washings of monolayers grown at an air-liquid interface. At the basal level Calu-3A exhibited an increased protein secretion, decreased lysozyme secretion and no change in IL-8 secretion compared to Calu-3 cells. Both Calu-3 and Calu-3A exhibited a dose dependent increase in ASF antibacterial properties after culturing with budesonide (0.01 to 100 mg/ml). But budesonide (100 mg/ml) significantly increased total protein and decreased lysozyme and IL-8 secretion in Calu-3A. Our results suggested that the altered level of antibacterial activity was associated with the altered ASF protein secretion, and the increase or decrease in ASF antibacterial activity in Calu-3 and Calu-3A was independent of ASF lysozyme content. We demonstrated that budesonide treatment resulted in significant changes in protein secretion in Calu-3 cells when CFTR function was reduced. Above studies might have implications in understanding the effect of inhaled medication budesonide in cystic fibrosis airways.