Neutrophil elastase (NE) activity is associated with many destructive lung diseases and is a predictor for structural lung damage in early cystic fibrosis (CF), which suggests normal maintenance of airway epithelium is prevented by uninhibited NE. However, limited data exist on how the NE activity in airways of very young children with CF affects function of the epithelia. The aim of this study was to determine if NE activity could inhibit epithelial homeostasis and repair and whether any functional effect was reversible by antiprotease alpha-1 antitrypsin (α1AT) treatment. Viability, inflammation, apoptosis, and proliferation were assessed in healthy non-CF and CF pediatric primary airway epithelial cells (pAECnon-CF and pAECCF, respectively) during exposure to physiologically relevant NE. The effect of NE activity on pAECCF wound repair was also assessed. We report that viability after 48 hours was significantly decreased by 100 nM NE in pAECnon-CF and pAECCF owing to rapid cellular detachment that was accompanied by inflammatory cytokine release. Furthermore, both phenotypes initiated an apoptotic response to 100 nM NE, whereas ≥50 nM NE activity significantly inhibited the proliferative capacity of cultures. Similar concentrations of NE also significantly inhibited wound repair of pAECCF, but this effect was reversed by the addition of α1AT. Collectively, our results demonstrate free NE activity is deleterious for epithelial homeostasis and support the hypothesis that proteases in the airway contribute directly to CF structural lung disease. Our results also highlight the need to investigate antiprotease therapies in early CF disease in more detail.