Respiratory infections, including Mycoplasma pneumoniae (Mp), contribute to asthma pathobiology. To date, the mechanisms underlying the increased susceptibility of asthmatics to airway Mp infection remain unclear. Short palate, lung, and nasal epithelium clone 1 (SPLUNC1) protein is a recently described large airway epithelial cell-derived molecule that was predicted to exert host defense activities. However, SPLUNC1 function and regulation in an infectious or allergic milieu are still unknown. We determined host defense and anti-inflammatory functions of SPLUNC1 protein in Mp infection and the regulation of SPLUNC1 by Mp and allergic inflammation (e.g., IL-13). SPLUNC1 function was examined in Mp or human airway epithelial cell cultures by using SPLUNC1 recombinant protein, overexpression and RNA interference. Human and mouse bronchial epithelial SPLUNC1 was examined using immunostaining, Western blotting, ELISA, laser capture microdissection, and real-time PCR. Mouse models of Mp infection and allergic inflammation and air-liquid interface cultures of normal human primary bronchial epithelial cells were used to study SPLUNC1 regulation by Mp and IL-13. We found that: 1) SPLUNC1 protein decreased Mp levels and inhibited epithelial IL-8 production induced by Mp-derived lipoproteins; 2) normal human and mouse large airway epithelial cells expressed high levels of SPLUNC1; and 3) although Mp infection increased SPLUNC1, IL-13 significantly decreased SPLUNC1 expression and Mp clearance. Our results suggest that SPLUNC1 serves as a novel host defense protein against Mp and that an allergic setting markedly reduces SPLUNC1 expression, which may in part contribute to the persistent nature of bacterial infections in allergic airways.