Cystic fibrosis (CF) is a progressive multiorgan autosomal recessive disease with devastating impact on the lungs caused by derangements of the CF transmembrane conductance regulator (CFTR) gene. Morbidity and mortality are caused by the triad of impaired mucociliary clearance, microbial infections and chronic inflammation. Pseudomonas aeruginosa is the main respiratory pathogen in individuals with CF infecting most patients in later stages. Despite its recognized clinical impact, molecular mechanisms that underlie P. aeruginosa pathogenesis and the host response to P. aeruginosa infection remain incompletely understood. The nuclear hormone receptor peroxisome proliferator-activated receptor (PPAR) γ (PPARγ), has shown to be reduced in CF airways. In the present study, we sought to investigate the upstream mechanisms repressing PPARγ expression and its impact on airway epithelial host defense. Endoplasmic reticulum-stress (ER-stress) triggered unfolded protein response (UPR) activated by misfolded CFTR and P. aeruginosa infection contributed to attenuated expression of PPARγ. Specifically, the protein kinase RNA (PKR)-like ER kinase (PERK) signaling pathway led to the enhanced expression of the CCAAT-enhancer-binding-protein homologous protein (CHOP). CHOP induction led to the repression of PPARγ expression. Mechanistically, we showed that CHOP induction mediated PPARγ attenuation, impacted the innate immune function of normal and ∆F508 primary airway epithelial cells by reducing expression of antimicrobial peptide (AMP) and paraoxanse-2 (PON-2), as well as enhancing IL-8 expression. Furthermore, mitochondrial reactive oxygen species production (mt-ROS) and ER-stress positive feedforward loop also dysregulated mitochondrial bioenergetics. Additionally, our findings implicate that PPARγ agonist pioglitazone (PIO) has beneficial effect on the host at the multicellular level ranging from host defense to mitochondrial re-energization.