Abstract Airway epithelial cells (AECs), dendritic cells (DCs) and alveolar macrophages are the primary cells involved in respiratory immunity and tolerance. Since DCs and macrophages exist in close proximity to AECs, the function of both these cells is influenced by AECs. Using a 2D model to study the interaction of human primary bronchial epithelial cells (representative of AECs) with DCs we have recently demonstrated that AECs enhance the immune surveillance capacity of myeloid DCs (mDCs) from the circulation at homeostasis. Culture of mDCs with AECs resulted in the upregulation of pathogen recognition receptors (PRRs) and downstream signaling molecules which were reflected in the enhanced inflammatory cytokine responses to Klebsiella pneumoniae LPS. In contrast to circulatory mDCs, culture of macrophages with AECs led to a significant inhibition of LPS induced proinflammatory responses. More importantly, AECs induced the secretion of TGF-β and IL-10 from macrophages even in the absence of LPS stimulation. Furthermore, macrophages exposed to AECs induced significantly increased level of T regulatory cells. Thus, it seems AECs induce tolerance in macrophages but enhance the immunogenicity of mDCs suggesting a division of labor between DCs and macrophages in the respiratory mucosa. Investigation into the possible mechanisms for this differential response indicates that exosomes from AECs may be partially responsible for inducing tolerance in macrophages while growth factors secreted by AECs may be involved in priming DCs. These data demonstrate that AECs secrete different mediators that enhance immunogenicity and tolerance in the respiratory tract. These mediators may potentially be used to modulate respiratory immunity.