Nogo-B is a member of the reticulon family of proteins (RTN-4B) that is highly expressed in lung tissue; however, its function remains unknown. We show that mice with Th2-driven lung inflammation results in a loss of Nogo expression in airway epithelium and smooth muscle compared with nonallergic mice, a finding which is replicated in severe human asthma. Mice lacking Nogo-A/B (Nogo-KO) display an exaggerated asthma-like phenotype, and epithelial reconstitution of Nogo-B in transgenic mice blunts Th2-mediated lung inflammation. Microarray analysis of lungs from Nogo-KO mice reveals a marked reduction in palate lung and nasal clone (PLUNC) gene expression, and the levels of PLUNC are enhanced in epithelial Nogo-B transgenic mice. Finally, transgenic expression of PLUNC into Nogo-KO mice rescues the enhanced asthmatic-like responsiveness in these KO mice. These data identify Nogo-B as a novel protective gene expressed in lung epithelia, and its expression regulates the levels of the antibacterial antiinflammatory protein PLUNC.