The functions of epithelial tissues are dictated by the types, abundance and distribution of the differentiated cells they contain. Attempts to restore tissue function after damage require knowledge of how physiological tasks are distributed among cell types, and how cell states vary between homeostasis, injury-repair and disease. In the conducting airway, a heterogeneous basal cell population gives rise to specialized luminal cells that perform mucociliary clearance1. Here we perform single-cell profiling of human bronchial epithelial cells and mouse tracheal epithelial cells to obtain a comprehensive census of cell types in the conducting airway and their behaviour in homeostasis and regeneration. Our analysis reveals cell states that represent known and novel cell populations, delineates their heterogeneity and identifies distinct differentiation trajectories during homeostasis and tissue repair. Finally, we identified a novel, rare cell type that we call the `pulmonary ionocyte', which co-expresses FOXI1, multiple subunits of the vacuolar-type H+-ATPase (V-ATPase) and CFTR, the gene that is mutated in cystic fibrosis. Using immunofluorescence, modulation of signalling pathways and electrophysiology, we show that Notch signalling is necessary and FOXI1 expression is sufficient to drive the production of the pulmonary ionocyte, and that the pulmonary ionocyte is a major source of CFTR activity in the conducting airway epithelium.