Background: The natriuretic hormone peptide (NHP)99-126, a C-terminal peptide of pro-atrial natriuretic factor (proANF), induces bronchodilatory effects in people with asthma. Recently, another plasmid-encoded C-terminal peptide, pNHP73-102, was shown to induce a long-lasting bronchoprotective effect in a mouse model of allergic asthma. Objective: This study was carried out to determine the role of lung epithelial cells in the bronchoprotective and anti-inflammatory activity of these peptides. Methods: Human type II alveolar epithelial cells (A549) and normal human bronchial epithelial (NHBE) cells were transfected with pNHP73-102 to test the effect of this peptide on activation of these cells. After transfection, cells were analyzed for changes in Ca++ and nitric oxide (NO) levels. Also, activation of NFKB and the extracellularly regulated kinase (ERK) 1, 2 signaling pathway was examined by luciferase reporter assay and phosphorylation studies respectively. Results: Analysis of intracellular Ca++ levels in pNHP73-102 -transfected A549 or NHBE showed that the peptide increases release. This Ca++ release was accompanied by an increase in the production of NO. Also, overexpression of pNHP73-102, but not pVAX control, in phorbol myristate acetate-activated A549 cells resulted in a significant decrease in expression of a cotransfected nuclear factorκB (NFκB)-luciferase reporter. Similarly, pNHP73-102 decreased TNF-α-induced NFκB activation in NHBE cells. Furthermore, NHP73-102 but not atrial natriuretic peptide decreased phosphorylation of Erk-1, 2 in A549 cells. Conclusions: Overexpression of pNHP73-102 in epithelial cells causes increased production of intracellular Ca++ and NO, with a concomitant decrease in activation of NFκB and ERK1, 2. These results suggest a bronchodilatory and anti-inflammatory activity of this peptide.