(A) The lung originates from a region of the embryonic gut, the epithelium of which is called the anterior foregut endoderm (gray shading, left tube); the numbers underneath give the age of the embryo (in days for mouse embryos and weeks for human embryos). The lung bud epithelium (gray shading, middle tube) emerges from the anterior foregut endoderm and undergoes branching morphogenesis (right tube) to give rise to stalk regions that will become the proximal airways, and a distal tip region that iteratively divides to give rise to more branching airways and eventually to alveoli (enlarged in dashed boxes). The stalk and tip regions have different expression patterns of the Sox2 and Sox9 transcription factors in humans and mice. (B) Induced pluripotent stem cells (iPSCs) can be differentiated in a stepwise fashion into definitive endoderm cells, then into anterior foregut endoderm and, finally, into airway and alveolar epithelial cells. (C) Epithelial stem cells from the airway and the alveolar compartments of the adult human lung can be manipulated in vitro to form adult airway epithelial cells (via conversion into adult basal cells) and adult alveolar organoids. (D) Nikolić et al. micro-dissected human lung bud tips and stalks (top) and analyzed them using global gene expression analysis (right) to identify signaling and transcriptional regulators that are expressed specifically in tip progenitor cells. This analysis was used to establish a chemically defined medium (CDM) in which human SOX2+SOX9+ cells self-renew over many passages. The SOX2+SOX9+ cells can be readily frozen and differentiated into airway and alveolar cell types for in vitro modeling and for engraftment experiments. Furthermore, the human SOX2-SOX9+/SOX2lowSOX9+ tips, characteristic of later developmental stages (greater than 17 weeks post-conception), and SOX2+SOX9 stalks (present at any stage of embryonic organ development before 21 weeks post-conception) convert into a SOX2+SOX9+ state in CDM cultures. This presumably reflects a reversion to an earlier tip progenitor state.