Ciliary neurotrophic factor (CNTF) protects photoreceptors and regulates their phototransduction machinery, but little is known about CNTF's effects on retinal pigment epithelial (RPE) physiology. Therefore, we determined the expression and localization of CNTF receptors and the physiological consequence of their activation in primary cultures of human fetal RPE (hfRPE). Cultured hfRPE express CNTF, CT1, and OsM and their receptors, including CNTFRα, LIFRβ, gp130, and OsMRβ, all localized mainly at the apical membrane. Exogenous CNTF, CT1, or OsM induces STAT3 phosphorylation, and OsM also induces the phosphorylation of ERK1/2 (p44/42 MAP kinase). CNTF increases RPE survivability, but not rates of phagocytosis. CNTF increases secretion of NT3 to the apical bath and decreases that of VEGF, IL8, and TGFβ2. It also significantly increases fluid absorption (J(V)) across intact monolayers of hfRPE by activating CFTR chloride channels at the basolateral membrane. CNTF induces profound changes in RPE cell biology, biochemistry, and physiology, including the increase in cell survival, polarized secretion of cytokines/neurotrophic factors, and the increase in steady-state fluid absorption mediated by JAK/STAT3 signaling. In vivo, these changes, taken together, could serve to regulate the microenvironment around the distal retinal/RPE/Bruch's membrane complex and provide protection against neurodegenerative disease.