Disruption of the lung architecture by genetic events, environmental insults, or transformation can lead to respiratory diseases such as acute respiratory distress syndrome and lung cancer. Identification of the stem cells of the lung and the processes by which they regulate homeostasis may lead to better targets for treatment of these diseases. There are a number of approaches to study stem cell biology. Development of the lung and the major pulmonary cells of the bronchioles and alveolar regions of the lung is discussed in this review. Likewise, identifying the proteins that are critical for cell-specific expression and differentiation may identify approaches for manipulation of gene expression for use as therapy or treatment of lung diseases. Furthermore, strategies for studying stem cells in the lung are addressed by using the mouse as a model system. Gaining a more detailed understanding of the stem cells of the lung may provide new insight into the processes that govern lung biology and may lead to better treatments for lung diseases. Enthusiasm for the use of exogenous stem cells to replace tissue, organs, or other defective or deficient cells is boundless. Before stem cells can be used indiscriminately for these purposes, understanding tissue genetics and immunology is essential. Progress has been made in these areas for pulmonary disease. Attention to these models will be applicable to other organs and diseases.