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Obliterative bronchiolitis (OB) is a major cause of mortality after lung transplantation. Depletion of airway stem cells (SCs) may lead to fibrosis in OB.Two major SC compartments in airways are submucosal glands (SMGs) and surface airway p63 (also known as TP63 [tumor protein 63])-positive/K5 (also known as KRT5 [keratin 5])-positive basal cells (BCs). We hypothesized that depletion of these SC compartments occurs in OB.Ferret orthotopic left lung transplants were used as an experimental model of OB, and findings were corroborated in human lung allografts. Morphometric analysis was performed in ferret and human lungs to evaluate the abundance of SMGs and changes in the expression of phenotypic BC markers in control, lymphocytic bronchiolitis, and OB airways. The abundance and proliferative capacity of proximal and distal airway SCs was assessed using a clonogenic colony-forming efficiency assay.Ferret allografts revealed significant loss of SMGs with development of OB. A progressive decline in p63+/K5+ and increase in K5+/K14+ and K14+ BC phenotypes correlated with the severity of allograft rejection in large and small ferret airways. The abundance and proliferative capacity of basal SCs in large allograft airways declined with severity of OB, and there was complete ablation of basal SCs in distal OB airways. Human allografts mirrored phenotypic BC changes observed in the ferret model.SMGs and basal SC compartments are depleted in large and/or small airways of lung allografts, and basal SC proliferative capacity declines with progression of disease and phenotypic changes. Global airway SC depletion may be a mechanism for pulmonary allograft failure.