Gaps in our knowledge about the organization and regulation of regenerative cells in the normal and diseased adult lung have been a major impediment to the identification of targets around which improved therapies for intractable lung diseases and lung cancer could be developed. During the last decade, specific lung injury models, the availability of genetically engineered reporter mice, and the development of robust cell separative methods and clonogenic assays for the identification and characterization of adult lung epithelial stem cells have provided the field with powerful tools for the identification and validation of predictive stem cell biomarkers and critical molecular pathways and microenvironmental signals which regulate their behavior. These approaches are key to the development of new therapies to restore healthy lung epithelium following injury or disease.