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Alveolar epithelial type II (AEII) cells are “professional” secretory cells that synthesize and secrete massive quantities of proteins to produce pulmonary surfactant and maintain airway immune defenses. To facilitate this high level of protein synthesis, AEII cells are equipped with an elaborate endoplasmic reticulum (ER) structure and possess an abundance of the machinery needed to fold, assemble, and secrete proteins. However, conditions that suddenly increase the quantity of new proteins entering the ER or that impede the capacity of the ER to fold proteins can cause misfolded or unfolded proteins to accumulate in the ER lumen, also called ER stress. To minimize this stress, AEII cells adapt by (1) reducing the quantity of proteins entering the ER, (2) increasing the amount of protein-folding machinery, and (3) removing misfolded proteins when they accumulate. Although these adaptive responses, aptly named the unfolded protein response, are usually effective in reducing ER stress, chronic aggregation of misfolded proteins is recognized as a hallmark feature of AEII cells in patients with idiopathic pulmonary fibrosis (IPF). Although mutations in surfactant proteins are linked to the development of ER stress in some rare IPF cases, the mechanisms causing protein misfolding in most cases are unknown. In this article, we review the mechanisms regulating ER proteostasis and highlight specific aspects of protein folding and the unfolded protein response that are most vulnerable to failure. Then, we postulate mechanisms other than genetic mutations that might contribute to protein aggregation in the alveolar epithelium of IPF lung.