Explants of rabbit tracheal epithelium were exposed to various CO2 and O2 levels and to different pH values for two weeks in organ culture. During culture the original explanted epithelium gradually changed from pseudostratified to stratified and there was a decrease in goblet cell density, and in the amount of PAS positive material in these cells. The changes in stratification were found to be independent of the pH of the medium or the CO2 level, but the proportions of ciliated cells and goblet cells were affected by the CO2/O2 ratio and by pH. Coordinated ciliary activity was preserved in most explants except for those cultured at high (80 and 95%) oxygen levels. A new growth of epithelium gradually covered the exposed connective tissue. This new epithelial growth developed the phenotypic expression of the original tissue; it gradually differentiated into ciliated cells and goblet cells. At increased CO2 levels and a high pH (7.7), differentiation into goblet cells increased fourfold, while differentiation into ciliated cells decreased. These findings suggest that high CO2 levels promote goblet cell differentiation. and thus increase the propensity for mucus secretion in unaerated epithelia. The correlation of these results with the fact that increased CO2 level present in the middle ear of patients with secretory otitis media may help to explain the large increase in the population of mucus-secreting cells in this disease process.