Although cystic fibrosis (CF), an autosomal recessive disease caused by mutations in the gene encoding for the CF transmembrane conductance regulator (CFTR), seems a good candidate for gene therapy, 15 years of intense investigation and a number of clinical trials have not yet produced a viable clinical gene-therapy strategy. In addition, the duration of gene expression has been shown to be limited, only lasting 1–4 weeks. Therefore, alternative approaches involve the search for, and use of, stem cell populations. Bone marrow contains different stem cell types, including hematopoietic stem cells and multipotent mesenchymal stromal cells. Numerous studies have now demonstrated the ability of hematopoietic stem cells and mesenchymal stromal cells to home to the lung and differentiate into epithelial cells of both the conducting airways and the alveolar region. However, engraftment of bone marrow-derived stem cells into the airways is a very inefficient process. Detailed knowledge of the cellular and molecular determinants governing homing to the lung and transformation of marrow cells into lung epithelial cells would benefit this process. Despite a very low level of engraftment of donor cells into the nose and gut, significant CFTR mRNA expression and a measurable level of correction of the electrophysiological defect were observed after transplantation of wild-type marrow cells into CF mice. It is uncertain whether this effect is due to the presence of CFTR-expressing epithelial cells derived from donor cells or to the immunomodulatory role of transplanted cells. Finally, initial studies on the usefulness of umbilical cord blood and embryonic stem cells in the generation of airway epithelial cells will be discussed in this review.