Cell-based therapy is recognized as one of potential therapeutic options for lung fibrosis. However, preparing stem/progenitor cells is complicated and not always efficient. Here, we show easily prepared cell populations having therapeutic capacity for lung inflammatory disease that are named as 'lung mixed culture-derived epithelial cells' (LMDECs). LMDECs expressed surfactant protein (SP)-C and gave rise to type I alveolar epithelial cells (AECs) in vitro and in vivo that partly satisfied type II AEC-like characteristics. An intratracheal delivery of not HEK 293 cells but LMDECs to the lung ameliorated bleomycin (BLM)-induced lung injury. A comprehensive analysis of bronchoalveolar fluid by western blot array revealed that LMDEC engraftment could improve the microenvironment in the BLM-instilled lung in association with stromal cell-derived factor-1 (SDF-1)/CXC chemokine receptor 4 signaling axis. SDF-1 enhanced both migration activity and differentiating efficiency of LMDECs. Further classification of LMDECs by flow cytometric study showed that a major population of LMDECs (LMDEC(Maj), 84% of total LMDECs) was simultaneously SP-C(+), CD44(+), CD45(+), and hematopoietic cell lineage(+) and that LMDECs included bronchioalveolar stem cells (BASCs) showing SP-C(+)Clara cell secretory protein(+)stem cell antigen (Sca)1(+) as a small population (1.8% of total LMDECs). CD44(+)-sorted LMDEC(Maj) and Sca1(+)-sorted LMDECs equally ameliorated fibrosis induced by BLM like LMDECs did. However, infiltrated neutrophils were observed in Sca1(+)-sorted LMDEC-treated alveoli that was not typical in LMDEC(Maj)- or LMDEC-treated alveoli. These findings suggest that the protective effect of LMDECs against BLM-induced lung injury depends greatly on that of LMDEC(Maj). Furthermore, the cells expressing both alveolar epithelial and hematopoietic cell lineage markers (SP-C(+)CD45(+)) that have characteristics corresponding to LMDEC(Maj) were observed in the alveoli of lung and increased approximately threefold in response to BLM instillation. Taken together, LMDECs newly classified in the present study are easily culture expanded and have a potential role in future regenerative cell therapy for pulmonary fibrosis.