Abstract The lung alveolar epithelium is exposed to the environment and pathogens and is thus highly susceptible to injury. Repair of the alveolar epithelium requires the activation of alveolar epithelial stem cells by signals from their surrounding niche. Significantly, the role of lung microvascular endothelial cells (LMVECs) in mediating this repair is poorly understood. In this proposal we address this gap in knowledge by focusing on a novel mechanism of bioactive lipid mediated interaction between lung microvascular endothelial cells (LMVEC) and alveoli epithelial cells (AEC) in the reparative niche. LMVECs account for >40% of total lung cells. They are juxtaposed to AECs (both alveolar type I cells (AT1) and type II cells (AT2)) and play essential roles in regulating their repair, although the underlining mechanisms remain unclear. AT1s have a thin and extended squamous shape, occupy > 95% of the alveoli surface area and mediate O2–CO2 exchange. AT2 occupy only 5% of the surface area, but play multiples roles, including producing surfactant and, importantly, acting as adult tissue stem cells to repair injured alveoli. Studies, including ours, have shown that while AT2s are normally quiescent, they can respond to signals released by surrounding niches and initiate a repair program by differentiating into AT1. However, the signals that regulate AT2 stem cell function(s) remain unclear. Recent studies suggest that AT1 also exhibit a certain degree of plasticity, but it is almost completely unknown whether and how AT1s participate in lung repair after injury. In preliminary studies, we generated a mouse model with endothelial cell (EC)-specific deletion of sphingosine kinase 1 (Sphk1), the enzyme responsible for spinhgosine-1-phosphate (S1P) production. These mutant mice manifest a significantly defective repair of AECs in the standardized Pseudomonas aeruginosa bacterial lung injury model. We further showed that S1P functions through its receptor S1PR2 expressed in AT2, leading to nuclear translocation of the transcriptional regulator Yes-Associated Protein (YAP), which mediates the differentiation of AT2 to AT1 and repair of injured alveoli. Furthermore, we observed that in response to S1P, AT1s undergo substantive alteration which likely contribute to the repair process. These fundamental observations led to our central hypothesis: that LMVECs constitute a niche that, when activated by alveolar injury, releases the bioactive lipid factor, S1P, which acts via S1PRs on both AT2 and AT1 to promote their reparative capacity required for the restoration of alveolar epithelium. To test this hypothesis, we propose three specific aims: Aim 1: To determine S1P-mediated interactions between the EC niche and AEC required for lung repair. Aim2: To define the functional significance of S1P-S1PR2-YAP signaling axis in regulating AT2 to AT1 transition and mediating alveolar repair. Aim 3: To test the hypothesis that S1P induces AT1 alteration leading to a...