The cystic fibrosis transmembrane conductance regulator (CFTR) is a Cl(-) channel that governs the quantity and composition of epithelial secretions. CFTR function is normally tightly controlled as dysregulation can lead to life-threatening diseases such as secretory diarrhoea and cystic fibrosis. CFTR activity is regulated by phosphorylation of its cytosolic regulatory (R) domain, and ATP binding and hydrolysis at two nucleotide-binding domains (NBDs). Here, we report that CFTR activity is also controlled by extracellular Cl(-) concentration ([Cl(-)]o). Patch clamp current recordings show that a rise in [Cl(-)]o stimulates CFTR channel activity, an effect conferred by a single arginine residue, R899, in extracellular loop 4 of the protein. Using NBD mutants and ATP dose response studies in WT channels, we determined that [Cl(-)]o sensing was linked to changes in ATP binding energy at NBD1, which likely impacts NBD dimer stability. Biochemical measurements showed that increasing [Cl(-)]o decreased the intrinsic ATPase activity of CFTR mainly through a reduction in maximal ATP turnover. Our studies indicate that sensing [Cl(-)]o is a novel mechanism for regulating CFTR activity and suggest that the luminal ionic environment is an important physiological arbiter of CFTR function, which has significant implications for salt and fluid homeostasis in epithelial tissues.