The transition from a liquid to a gas filled tubular network is the prerequisite for normal function of vertebrate lungs and invertebrate tracheal systems. However, the mechanisms underlying the process of gas filling remain obscure. Here we show that waterproof, encoding a fatty acyl-CoA reductase (FAR), is essential for the gas filling of the tracheal tubes during Drosophila embryogenesis, and does not affect branch network formation or key tracheal maturation processes. However, electron microscopic analysis reveals that in waterproof mutant embryos the formation of the outermost tracheal cuticle sublayer, the envelope, is disrupted and the hydrophobic tracheal coating is damaged. Genetic and gain-of-function experiments indicate a non-cell-autonomous waterproof function for the beginning of the tracheal gas filling process. Interestingly, Waterproof reduces very long chain fatty acids of 24 and 26 carbon atoms to fatty alcohols. Thus, we propose that Waterproof plays a key role in tracheal gas filling by providing very long chain fatty alcohols that serve as potential substrates for wax ester synthesis or related hydrophobic substances that ultimately coat the inner lining of the trachea. The hydrophobicity in turn reduces the tensile strength of the liquid inside the trachea, leading to the formation of a gas bubble, the focal point for subsequent gas filling. Waterproof represents the first enzyme described to date that is necessary for tracheal gas filling without affecting branch morphology. Considering its conservation throughout evolution, Waterproof orthologues may play a similar role in the vertebrate lung.