PROJECT SUMMARY Respiratory diseases like the Acute Respiratory Distress Syndrome, Idiopathic Pulmonary Fibrosis and Chronic Obstructive Pulmonary Disease produce significant morbidity and mortality worldwide. While each of these diseases are distinct, they all have in common a failure to maintain or repair lung alveoli. Thin, delicate alveolar type 1 (AT1) cells encompass greater than 95 percent of the alveolar gas exchange surface, interspersed with cuboidal, surfactant-secreting alveolar type 2 (AT2) cells in a monolayer epithelium. A minor subset of AT2 cells serve as the principal stem cells that renew alveoli throughout the lifetime. They function to regenerate the epithelium after injury, and there is some evidence to suggest that their disfunction underlies chronic forms of respiratory disease. Establishing a deep understanding of the biology of AT2 stem cells may lead to new pharmacological and cell-based therapies to treat these diseases. Despite recent, significant advances in lung alveolar stem cell biology, the physiological behavior of AT2 stem cells and the molecular mechanisms that regulate this behavior have proven to be challenging to define. We developed a mouse genetic system to study dynamic activation of AT2 stem cells in vivo that employs targeted ablation of AT1 cells using Diphtheria toxin. As expected, we found that AT2 cell self-duplication was rapidly induced upon AT1 cell ablation, however, this was preceded by immediate and widespread AT2-to-AT1 transdifferentiation. Our results reveal a previously unappreciated role for a (non-stem) AT2 cell population in rapidly regenerating the alveolar barrier. We hypothesize that alveolar repair involves a two-step mechanism in which direct transdifferentiation of AT2 cells into AT1 cells initially restores barrier integrity and is followed by self-duplication of AT2 stem cells. The proposed project aims to further probe the mechanisms and physiological importance of this ultra-rapid restoration of the alveolar gas exchange and barrier surface. Our findings will help to establish a foundational model of epithelial regeneration in lung alveoli, and will inform practical strategies for manipulating AT2 stem cells in therapeutic applications.