Pulmonary neuroepithelial bodies (NEB) are widely distributed throughout the airway mucosa of human and animal lungs. Based on the observation that NEB cells have a candidate oxygen sensor enzyme complex (NADPH oxidase) and an oxygen-sensitive K+ current, it has been suggested that NEB may function as airway chemoreceptors. Here we report that mRNAs for both the hydrogen peroxide sensitive voltage gated potassium channel subunit (KH2O2) KV3.3a and membrane components of NADPH oxidase (gp91phox and p22phox) are coexpressed in the NEB cells of fetal rabbit and neonatal human lungs. Using a microfluorometry and dihydrorhodamine 123 as a probe to assess H2O2 generation, NEB cells exhibited oxidase activity under basal conditions. The oxidase in NEB cells was significantly stimulated by exposure to phorbol esther (0.1 microM) and inhibited by diphenyliodonium (5 microM). Studies using whole-cell voltage clamp showed that the K+ current of cultured fetal rabbit NEB cells exhibited inactivating properties similar to KV3.3a transcripts expressed in Xenopus oocyte model. Exposure of NEB cells to hydrogen peroxide (H2O2, the dismuted by-product of the oxidase) under normoxia resulted in an increase of the outward K+ current indicating that H2O2 could be the transmitter modulating the O2-sensitive K+ channel. Expressed mRNAs or corresponding protein products for the NADPH oxidase membrane cytochrome b as well as mRNA encoding KV3.3a were identified in small cell lung carcinoma cell lines. The studies presented here provide strong evidence for an oxidase-O2 sensitive potassium channel molecular complex operating as an O2 sensor in NEB cells, which function as chemoreceptors in airways and in NEB related tumors. Such a complex may represent an evolutionary conserved biochemical link for a membrane bound O2-signaling mechanism proposed for other cells and life forms.