The mammalian lung epithelium is composed of a wide array of specialized cells that have adapted to survive environmental exposure and perform the tasks necessary for respiration. Although the majority of these cells are remarkably quiescent during adult lung homeostasis, a growing body of literature has demonstrated the capacity of these epithelial lineages to proliferate in response to injury and regenerate lost or damaged cells. In this review, we focus on the regionally distinct lung epithelial cell types that contribute to repair after injury, and we address current controversies regarding whether elite stem cells or frequent facultative progenitors are the predominant participants. We also shed light on the newly emerging approaches for exogenously generating similar lung epithelial lineages from pluripotent stem cells.