Celebrating its 50th anniversary in 2017, bronchopulmonary dysplasia (BPD)—the chronic lung disease of prematurity that follows ventilator and oxygen therapy for acute respiratory failure—remains the most frequent complication of extreme prematurity. Survival of premature infants born at increasingly earlier stages of gestation has made the prevention of lung injury increasingly challenging. BPD is postulated to be a misdirection of many functions in the developing lung, including growth factor signalling and matrix as well as cellular composition, resulting in impaired alveolar and lung vascular growth. Despite improvements in understanding the mechanisms that regulate normal lung development, BPD remains without therapies. Insights into stem cell biology have identified the repair potential of stem cells. Promising preclinical studies demonstrated the lung protective effects of stem cell–based therapies in animal models mimicking BPD, leading to early-phase clinical trials. Although the time is ripe to conduct well-designed early-phase clinical trials, much more needs to be learned about the biology of these cells to develop safe, efficient, high-quality, clinical-grade cell products. Stem cells are essential for normal organ development, maintenance, and repair. It is therefore biologically plausible that exhaustion/dysfunction of resident lung stem cells contributes to the inability of the immature lung to repair itself. Understanding how normal lung stem cells function and how these cells are perturbed in BPD may prove useful in designing superior cell products with enhanced repair capabilities to ensure the successful translation of basic research into clinical practice.