Repeated exposures to bioactivated cytotoxicants such as naphthalene (NA) render the target population, Clara cells, resistant to further injury through a glutathione-dependent mechanism. The current studies were designed to test the hypothesis that the mechanism for tolerance is localized in Clara cells. We used three approaches to test this hypothesis. First, using airway explants from tolerant mice maintained in culture, we sought to determine if the mechanism of Clara cell tolerance was airway-specific. Second, using inhalation as the route of exposure, we sought to determine if Clara cells at all airways levels become tolerant to repeated inhalation exposures of NA. Third, by measuring gamma-glutamylcysteine synthetase (gamma-GCS) activity and expression we determined if tolerance to inhaled NA resulted from shifts in phase-II metabolism. Our results indicate that Clara cells in explants from tolerant mice remained tolerant to NA injury in culture. When mice were exposed to repeated inhalation exposures of NA (15 ppm), we found that Clara cells at all airway levels became tolerant. Expression and activity analysis revealed that gamma-GCS, the rate-limiting enzyme in glutathione synthesis, is induced in tolerant Clara cells. Buthionine sulfoximine, a gamma-GCS inhibitor, was able to eliminate the resistance of these tolerant cells. We conclude: (1) the mechanism of NA tolerance in Clara cells is airway specific, (2) the specific mechanism allows Clara cells to become tolerant to NA vapor at levels relevant to human exposure, and (3) the mechanism of tolerance to inhaled NA is highly dependent on induction of the catalytic enzyme, gamma-GCS.