The olfactory epithelium (OE) of mice deficient in cystic fibrosis transmembrane conductance regulator (CFTR) exhibits ion transport deficiencies reported in human CF airways, as well as progressive neuronal loss, suggesting defects in olfactory neuron homeostasis. Microvillar cells, a specialized OE cell-subtype, have been implicated in maintaining tissue homeostasis. These cells are endowed with a PLCβ2/IP3 R3/TRPC6 signal transduction pathway modulating release of neuropeptide Y (NPY), which stimulates OE stem cell activity. It is unknown, however, whether microvillar cells also mediate the deficits observed in CFTR-null mice. Here we show that Cftr mRNA in mouse OE is exclusively localized in microvillar cells and CFTR immunofluorescence is coassociated with the scaffolding protein NHERF-1 and PLCβ2 in microvilli. In CFTR-null mice, PLCβ2 was undetectable, NHERF-1 mislocalized, and IP3 R3 more intensely stained, along with increased levels of NPY, suggesting profound alteration of the PLCβ2/IP3 R3 signaling pathway. In addition, basal olfactory neuron homeostasis was altered, shown by increased progenitor cell proliferation, differentiation, and apoptosis and by reduced regenerative capacity following methimazole-induced neurodegeneration. The importance of CFTR in microvillar cells was further underscored by decreased thickness of the OE mucus layer and increased numbers of immune cells within this tissue in CFTR-KO mice. Finally, we observed enhanced immune responses to an acute viral-like infection, as well as hyper-responsiveness to chemical and physical stimuli applied intranasally. Taken together, these data strengthen the notion that microvillar cells in the OE play a key role in maintaining tissue homeostasis and identify several mechanisms underlying this regulation through the multiple functions of CFTR.