The conducting airway forms a protective mucosal barrier and is the primary target of airway disorders. The molecular events required for the formation and function of the airway mucosal barrier, as well as the mechanisms by which barrier dysfunction leads to early onset airway diseases, remain unclear. In this study, we systematically characterized the developmental landscape of the mouse airway using single-cell RNA sequencing and identified remarkably conserved cellular programs operating during human fetal development. We demonstrated that in mouse, genetic inactivation of chloride channel Ano1/Tmem16a compromises airway barrier function, results in early signs of inflammation, and alters the airway cellular landscape by depleting epithelial progenitors. Mouse Ano1^-/-mutants exhibited mucus obstruction and abnormal mucociliary clearance that resemble the airway defects associated with cystic fibrosis. The data reveal critical and non-redundant roles for Ano1 in organogenesis, and show that chloride channels are essential for mammalian airway formation and function.