The present study was designed to investigate the effect of changes in osmolarity on the modulatory role of the respiratory epithelium on the underlying smooth muscle. Canine bronchial segments with or without epithelium were perfused intraluminally with modified Krebs-Ringer bicarbonate solution. The transluminal isometric tension was recorded by means of stirrups passed through the bronchial wall. During contractions to extraluminal carbachol, the tissues with epithelium exhibited epithelium-dependent relaxations to hypotonic solution given intraluminally. The level of relaxation was dependent on the osmotic pressure. No significant difference was noted between relaxations due to hypotonic solution made by mixing the Krebs-Ringer solution with distilled water and those made by decreasing the concentration of sodium chloride. The epithelium-dependent relaxations could not be blocked by the antagonists or blockers of cyclo-oxygenase, endothelium-derived relaxing factor, alpha-adrenoceptors, beta-adrenoceptors, and sodium channels. No evidence for the release of a relaxing factor into the bronchial lumen was found in bioassay study. When the preparation was stimulated with hypertonic solutions prepared by adding mannitol or urea, similar relaxations were induced in tissues with and without epithelium. These observations suggest that changes in osmolarity affect the responses of canine bronchi to carbachol and that the epithelium modulates the responses of airway to hypotonic solutions.