Rationale: Endothelin-1 (ET-1) is increased in patients with high altitude pulmonary edema (HAPE) and acute respiratory distress syndrome (ARDS) and these patients have decreased alveolar fluid reabsorption (AFR). Objectives: To determine whether ET-1 impairs AFR via activation of endothelial cells and nitric oxide generation. Methods: Isolated perfused rat lung, transgenic rats deficient in ET-B receptors, co-incubation of lung human microvacular endothelial cells (HMVEC-L) with rat alveolar epithelial type II (ATII) or A549 cells, ouabain-sensitive ⁸⁶Rb⁺ uptake. Measurements and Main Results: The ET-1-induced decrease in AFR was prevented by blocking the endothelin receptor, ET-B, but not ET-A. Endothelial-epithelial cell interaction is required, as direct exposure of alveolar epithelial cells (AEC) to ET-1 did not affect Na,K-ATPase function nor protein abundance at the plasma membrane, whereas co-incubation of HMVEC-L and AEC with ET-1 decreased Na,K-ATPase activity and protein abundance at the plasma membrane. Exposing transgenic rats deficient in ET-B receptors in the pulmonary vasculature (ET B -/-) to ET-1 did not decrease AFR nor Na,K-ATPase protein abundance at the plasma membrane of AEC. Exposing HMVEC-L to ET-1 led to increased nitric oxide (NO), and the ET-1 induced downregulation of Na,K-ATPase was prevented by the nitric oxide synthase inhibitor L-NAME, but not by a guanylate cyclase inhibitor. Conclusion: We provide first evidence that ET-1 via an endothelial-epithelial interaction leads to decreased AFR, by a mechanism involving activation of endothelial ET-B receptors and NO generation leading to alveolar epithelial Na,K-ATPase downregulation in a cGMP independent manner.