ABSTRACT The maintenance of an intact alveolar epithelial barrier is crucial for lung function. Failure of steady-state replacement or post-injury regeneration of alveolar epithelial cells underlies the pathogenesis of many lung diseases. In recent years, certain subgroups of cells have been identified as putative stem/progenitor cells in the alveolar epithelium during homeostasis and regeneration. However, the identities of these cells and the mechanisms regulating their behavior are still incompletely understood. Recent studies have indicated that some immunity related signaling molecules can regulate the activity of alveolar epithelial progenitors, but the mechanisms that direct these signaling events during lung homeostasis or regeneration have not been well characterized. The objective of this proposal is to determine the distinct roles of immunity related signaling pathways in the regulation of alveoli progenitor cell functions, both during steady-state maintenance as well as post injury repair. An additional goal is to explore the possibility that dysregulation of these signaling processes is related to chronical lung diseases such as emphysema or fibrosis. Two types of epithelial cells cover the lung alveoli: alveolar type I cells (AT1) cover >95% of the surface area and facilitate O2-CO2 exchange, whereas alveolar type II cells (AT2) are responsible for the secretion of surfactant. Importantly, AT2s also function as stem/progenitor cells by undergoing self-renewal and differentiation into AT1s. In preliminary studies, we demonstrated that 1) A small subset of AT2s (1-3% of total) showed stem cell characteristics indicating a role of these cells for steady-state maintenance of alveoli. These cells had intrinsic NFκB and STAT1 activity and these immunity related signals were able to regulate their progenitor functions; 2) After bacterial induced lung injury, more AT2s are activated and behave as facultative stem cells to repair the alveoli. The reparative functions of these cells are regulated by STAT1 and STAT3 mediated signals; and 3) AT2 specific disruption of STAT1 causes sustained fibrosis after bleomycin induced lung injury. This effect is likely induced by an aberrant subpopulation of AT2/AT1 intermediate cells resulting from a failed transition of AT2s to AT1s. Based on these data, we hypothesize that the progenitor function of a subset of AT2s in alveolar homeostasis and post injury regeneration is regulated by distinct immunity related signals. Disruption of these signals is related to the pathogenesis of chronic lung diseases. We will test these ideas with the following specific aims: Aim 1: To determine how NFκB and STAT1 mediated immunity related signaling regulates the stem cell properties of CD44high AT2 subsets during steady-state homeostasis. Aim 2: To determine the role of STAT1/STAT3 dependent, likely NFκB independent, immunity signaling in regulating the facultative progenitor cell functions of AT2 cells in post injury ...