Chronic obstructive pulmonary disease and asthma are characterized by hyperreactive airway responses that predispose patients to episodes of acute airway constriction. Recent studies suggest a complex paradigm of GABAergic signaling in airways that involves GABA-mediated relaxation of airway smooth muscle. However, the cellular source of airway GABA and mechanisms regulating its release remain unknown. We questioned whether epithelium is a major source of GABA in the airway and whether the absence of epithelium-derived GABA contributes to greater airway smooth muscle force. Messenger RNA encoding glutamic acid decarboxylase (GAD) 65/67 was quantitatively measured in human airway epithelium and smooth muscle. HPLC quantified GABA levels in guinea pig tracheal ring segments under basal or stimulated conditions with or without epithelium. The role of endogenous GABA in the maintenance of an acetylcholine contraction in human airway and guinea pig airway smooth muscle was assessed in organ baths. A 37.5-fold greater amount of mRNA encoding GAD 67 was detected in human epithelium vs. airway smooth muscle cells. HPLC confirmed that guinea pig airways with intact epithelium have a higher constitutive elution of GABA under basal or KCl-depolarized conditions compared with epithelium-denuded airway rings. Inhibition of GABA transporters significantly suppressed KCl-mediated release of GABA from epithelium-intact airways, but tetrodotoxin was without effect. The presence of intact epithelium had a significant GABAergic-mediated prorelaxant effect on the maintenance of contractile tone. Airway epithelium is a predominant cellular source of endogenous GABA in the airway and contributes significant prorelaxant GABA effects on airway smooth muscle force.