Tracheal cytotoxin exerts its effects primarily by targeting the ciliated epithelium of the respiratory tract. It disrupts the normal function of ciliated cells, which are vital for clearing mucus and pathogens from the lungs. The toxin induces the loss of cilia and the death of epithelial cells, leading to impaired mucociliary clearance. This impairment can result in chronic respiratory conditions and contribute to the severity of whooping cough and other respiratory diseases.