Airway epithelial cells are of great interest for research on lung development, regeneration and disease modeling. This protocol describes how to generate cystic fibrosis (CF) transmembrane conductance regulator protein (CFTR)-expressing airway epithelial cells from human pluripotent stem cells (PSCs). The stepwise approach from PSC culture to differentiation into progenitors and then mature epithelia with apical CFTR activity is outlined. Human PSCs that were inefficient at endoderm differentiation using our previous lung differentiation protocol were able to generate substantial lung progenitor cell populations. Augmented CFTR activity can be observed in all cultures as early as at 35 d of differentiation, and full maturation of the cells in air-liquid interface cultures occurs in <5 weeks. This protocol can be used for drug discovery, tissue regeneration or disease modeling.