Lung and airway epithelial cells generated in vitro from human pluripotent stem cells (hPSCs) have applications in regenerative medicine, modeling of lung disease, drug screening and studies of human lung development. Here, we describe a strategy for directed differentiation of hPSCs into mature lung and airway epithelial cells obtained through maturation of NKX2.1+ hPSC-derived lung progenitors in a 3D matrix of collagen I in the absence of glycogen synthase kinase 3 inhibition. This protocol is an extension of our previously published protocol on the directed differentiation of lung and airway epithelium from hPSCs that modifies the technique and offers additional applications. This protocol is conducted in defined media conditions, has a duration of 50-80 d, does not require reporter lines and results in cultures containing mature alveolar type II and I cells as well as airway basal, ciliated, club and neuroendocrine cells. We also present a flow cytometry strategy to assess maturation in the cultures. Several of these populations, including mature NGFR+ basal cells, can be prospectively isolated by cell sorting and expanded for further investigation.