ABSTRACT The formation of the lung alveolus is the culminative event in the development of the respiratory system. The alveoli perform the hallmark function of the respiratory system: gas exchange between the cardiovascular system and the external environment. Alveologenesis begins at approximately birth in mice, ends between 2-4 weeks of postnatal life in mice but extends several years after birth in humans. Disruptions in alveologenesis can lead to severe pediatric diseases such as bronchopulmonary dysplasia (BPD), and in the adult, defective regeneration or persistent degeneration of alveolar homeostasis can lead to chronic obstructive pulmonary disease (COPD). The mature lung alveolus contains a myriad of epithelial, endothelial, and mesenchymal cell lineages, all of which have to communicate properly to form a functional niche that efficiently exchanges gasses with the external environment. Despite the importance of the lung alveolus, we still have little information how the multifarious cell lineages within the lung alveolus communicate with each other during alveolar development or regeneration. During the previous funding period of this grant, we have identified many novel transcriptional, epigenetic, and signaling pathways that play essential roles in the development, homeostasis, and regeneration of the lung alveolus. We have also dedicated extensive effort during the first funding period in defining at a single cell level the full cellular repertoire, molecular pathways, developmental trajectories, cellular plasticity, and transient cell phenotypes that are present during alveologenesis, to derive a better understanding of this critical stage of lung development and its response to injury. These preliminary data have confirmed our previous work showing the importance of pathways such as Tgf-beta, and begun to define the molecular cues that drive development and maturation of poorly understood cell lineages including the alveolar type 1 (AT1) cell. Together, our data reveal two novel insights into AT1 cell biology: 1) AT1 cells play a central role in mediating cellular crosstalk in the developing and mature alveolus and 2) AT1 cells, but not AT2 cells, exhibit a remarkable level of lineage plasticity in response to neonatal injury and this plasticity is controlled, in part, by the Hippo pathway. Taken together, our studies highlight the central role AT1 cells play in alveolar development and homeostasis.