Alveolar type 2 (AT2) cells are heterogeneous cells; where specialised AT2 subpopulations within this lineage exhibit stem cell properties. However, the existence of quiescent, immature cells within the AT2 lineage, which are activated during lung regeneration, is unknown.SftpcCreERT2/+; tdTomatoflox/flox mice were used for the labelling of AT2 cells and labeled subpopulations were analysed by flow cytometry, qPCR, ATAC-seq, gene arrays, pneumonectomy, and culture of precision-cut lung slides. ScRNA-seq data from human lungs were analysed.In mice, we detected two distinct AT2 subpopulations with low tdTomato level (TomLow) and high tdTomato level (TomHigh). TomLow express lower level of AT2 differentiation markers, Fgfr2b and Etv5, while TomHigh, as bona fide mature AT2 cells, show higher levels of Sftpc, Sftpb, Sftpa1, Fgfr2b and Etv5 expression. ATAC-seq analysis indicates that TomLow and TomHigh constitute two distinct cell populations with specific silencing of Sftpc, Rosa26 and cell cycle gene loci in TomLow. Upon pneumonectomy, the number of TomLow but not TomHigh cells increases and TomLow upregulate the expression of Fgfr2b, Etv5, Sftpc, Ccnd1 and Ccnd2 compared to sham. TomLow cells overexpress PD-L1, an immune inhibitory membrane receptor ligand, which is used by flow cytometry to differentially isolate these two sub-populations. In the human lung, data mining of a recent scRNA-seq AT2 dataset demonstrates the existence of a PD-L1Pos population. Therefore, we have identified a novel population of AT2 quiescent, immature progenitor cells in mouse that expand upon pneumonectomy and provided evidence for the existence of such cells in human.