PROJECT SUMMARY The multiple tissue compartments or niches in the respiratory system display varying abilities to repair and regenerate after acute injury or in chronic disease states. The alveolar niche is critical for gas exchange as well as acting as a sentinel for environmental stimuli including infectious organisms and pollutants. Much of the regenerative power of the alveoli rests within the alveolar type 2 (AT2) cell, which is not only critical for surfactant production and innate immune responses, but also harbors the resident progenitor cell population. A building body of research has shown that subsets of AT2 cells can proliferate and differentiate into alveolar type 1 (AT1) cells after acute injury, which is critical for regenerating functional alveoli. These AT2 cells behaviors are regulated by signaling, transcriptional, and epigenetic mechanisms that have only recently started to be elucidated. To further our understanding of the role that epigenetic pathways play in lung alveolar regeneration, we performed a small molecule screen using an alveolar organoid assay to identify pathways that promote alveolar repair and regeneration. This screen identified multiple inhibitors of the Disruptor of Telomeric Silencing- 1 like (Dot1L) that regulate alveolar organoid size. Dot1L is the sole enzyme which is known to methylate H3K79 (H3K79me1/2/3 marks), and Dot1L has been demonstrated to play critical roles in promoting pluripotent stem cell reprogramming, and cellular responses to injury and tissue regeneration. Our data show that Dot1L inhibition increases alveolar organoid size in a dose dependent manner. To better understand the role of Dot1L in lung development and regeneration in vivo, we generated a Dot1L conditional knockout mouse allele and inactivated Dot1L during lung development and in multiple models of lung injury and regeneration. Loss of Dot1L during lung endoderm development results in the loss of H3K79 methylation and premature or enhanced expression of AT1 and AT2 marker genes, suggesting acceleration of AT1 and AT2 cell differentiation. In two models of lung alveolar regeneration, loss of Dot1L in AT2 cells results in dramatic acceleration of AT2-AT1 differentiation after lung injury. Single cell RNA-seq (scRNA-seq) combined with ChIP-seq analysis reveals that loss of Dot1L leads to the emergence of a new AT2 cell state characterized by a dramatic increase in the expression of the important transcriptional regulators Id1 and Id2 as well as an overall increase in expression of metabolism genes related to oxidative phosphorylation (OxPhos). Taken together, our data lead to the hypothesis that Dot1L plays an important role in regulating lung alveolar responses to acute lung injury by regulating the lineage barrier between AT2 and AT1 cells via de-repression of the critical transcriptional regulators Id1/Id2 and a switch to OxPhos metabolism, resulting in acceleration of AT2-AT1 differentiation.