Pulmonary research requires models that represent the physiology of alveolar epithelium but concerns with reproducibility, consistency and the technical and ethical challenges of using primary or stem cells has resulted in widespread use of continuous cancer or other immortalized cell lines. The A549 ‘alveolar’ cell line has been available for over four decades but there is an inconsistent view as to its suitability as an appropriate model for primary alveolar type II (ATII) cells. Since most work with A549 cells involves short term culture of proliferating cells, we postulated that culture conditions that reduced proliferation of the cancer cells would promote a more differentiated ATII cell phenotype. We examined A549 cell growth in different media over long term culture and then used microarray analysis to investigate temporal regulation of pathways involved in cell cycle and ATII differentiation; we also made comparisons with gene expression in freshly isolated human ATII cells. Analyses indicated that long term culture in Ham’s F12 resulted in substantial modulation of cell cycle genes to result in a quiescent population of cells with significant up-regulation of autophagic, differentiation and lipidogenic pathways. There were also increased numbers of up- and down-regulated genes shared with primary cells suggesting adoption of ATII characteristics and multilamellar body (MLB) development. Subsequent Oil Red-O staining and Transmission Electron Microscopy confirmed MLB expression in the differentiated A549 cells. This work defines a set of conditions for promoting ATII differentiation characteristics in A549 cells that may be advantageous for studies with this cell line.