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The epithelial cells lining the mammalian lung are subjected to constant interaction with the external environment, necessitating robust regeneration strategies to deal with cell loss due to natural turnover or damage arising from inhaled agents or disease. Since lung epithelial function extends beyond respiratory gas exchange to include roles such as immune defense and mucociliary clearance, a diverse complement of epithelial cell types exists that are regionally distributed along the respiratory tree and extensive surface area of the alveolar interface. Although steady-state turnover of the epithelium appears to be relatively low in ideal situations, the vital role of the lung requires stem and progenitor cell populations that can promptly respond to the loss or damage of epithelial tissues. The identity and role of stem cell populations that carry out repair and replacement in the lung has begun to be clarified in recent years, led by cell lineage tracking experiments in the mouse lung, which have revealed a complex interplay of differentiation, transdifferentiation, and dedifferentiation between lung stem cells and functional respiratory cell populations. In this review article, we present the current understanding of the stem cell populations within the pulmonary epithelium and describe ongoing efforts to use these stem cell populations to generate models for exploring lung function and disease.