Fluid-free alveolar space is critical for normal gas exchange. Influenza virus alters fluid transport across respiratory epithelia producing rhinorrhea, middle ear effusions, and alveolar flooding. However, the mechanism of fluid retention remains unclear. We investigated influenza virus strain A/PR/8/34, which can attach and enter mammalian cells but is incapable of viral replication and productive infection in mammalian epithelia, on epithelial sodium channels (ENaC) in rat alveolar type II (ATII) cells. In parallel, we determined the effects of virus on amiloride-sensitive (i.e., ENaC-mediated) fluid clearance in rat lungs in vivo. Although influenza virus did not change the inulin permeability of ATII monolayers, it rapidly reduced the net volume transport across monolayers. Virus reduced the open probability of single ENaC channels in apical cell-attached patches. U-73122, a phospholipase C (PLC) inhibitor, and PP2, a Src inhibitor, blocked the effect of virus on ENaC. GF-109203X, a protein kinase C (PKC) inhibitor, also blocked the effect, suggesting a PKC-mediated mechanism. In parallel, intratracheal administration of influenza virus produced a rapid inhibition of amiloride-sensitive (i.e., ENaC-dependent) lung fluid transport. Together, these results show that influenza virus rapidly inhibits ENaC in ATII cells via a PLC- and Src-mediated activation of PKC but does not increase epithelial permeability in this same rapid time course. We speculate that this rapid inhibition of ENaC and formation of edema when the virus first attaches to the alveolar epithelium might facilitate subsequent influenza infection and may exacerbate influenza-mediated alveolar flooding that can lead to acute respiratory failure and death.