Neutrophil elastase (NE) is thought to be the most important protease which damages the cystic fibrosis (CF) lung. Attempts have been made to suppress this activity using the plasma-derived inhibitor, alpha1-antitrypsin (AAT). In this pilot study, the safety and efficacy of inhaled recombinant human AAT (rAAT) as a treatment for CF were investigated. Thirty-nine patients participated in a prospective, double-blinded, randomized, placebo-controlled phase II trial to examine the effect of rAAT (500, 250, and 125 mg) on sputum NE activity. Sputum myeloperoxidase (MPO), interleukin-8, tumor necrosis factor receptors, sputum and plasma NE/AAT complexes, and safety parameters were also measured. Subjects were randomized to receive nebulized treatment once a day for 4 weeks, followed by 2–4 weeks with no study treatment, and then a 2-week rechallenge phase. Trends toward a reduction in NE activity were observed in patients treated with 500 mg and 250 mg of rAAT compared to placebo. Sputum NE/AAT complex and MPO levels were lower on rAAT compared to placebo. No major adverse events and, in particular, no allergic reactions to rAAT were observed. Although significant differences between rAAT and placebo for sputum NE activity were not observed, some improvements were found for secondary efficacy variables. This study demonstrated that nebulized rAAT is safe and well-tolerated, but has a limited effect on NE activity and other markers of inflammation. Pediatr Pulmonol.