The lung is a relatively quiescent tissue comprised of infrequently proliferating epithelial, endothelial, and interstitial cell populations. No classical stem cell hierarchy has yet been described for the maintenance of this essential tissue; however, after injury, a number of lung cell types are able to proliferate and reconstitute the lung epithelium. Differentiated mature epithelial cells and newly recognized local epithelial progenitors residing in specialized niches may participate in this repair process. This review summarizes recent discoveries and controversies, in the field of stem cell biology, that are not only challenging, but also advancing an understanding of lung injury and repair. Evidence supporting a role for the numerous cell types believed to contribute to lung epithelial homeostasis is reviewed, and initial studies employing cell-based therapies for lung disease are presented. As a detailed understanding of stem cell biology, lung development, lineage commitment, and epithelial differentiation emerges, an ability to modulate lung injury and repair is likely to follow.