olar type I (TI) cells are large, squamous cells that cover 95-99% of the internal surface area of the lung. Although TI cells are believed to be terminally differentiated, incapable of either proliferation or phenotypic plasticity, TI cells in vitro both proliferate and express phenotypic markers of other differentiated cell types. Rat TI cells isolated in purities of Ͼ99% proliferate in culture, with a sixfold increase in cell number before the cells reach confluence; Ͼ50% of the cultured TI cells are Ki67ϩ. At cell densities of 1-2 cells/well, ϳ50% of the cells had the capacity to form colonies. Under the same conditions, type II cells do not proliferate. Cultured TI cells express RTI40 and aquaporin 5, phenotypic markers of the TI cell phenotype. By immunofluorescence, Western blotting, and Q-PCR, TI cells express OCT-4A (POU5F1), a transcription factor associated with maintenance of the pluripotent state in stem cells. Based on the expression patterns of various marker proteins, TI cells are distinct from either of two recently described putative pulmonary multipotent cell populations, the bronchoalveolar stem cell or the OCT-4ϩ stem/ progenitor cell. Although TI cells in adult rat lung tissue do not express either surfactant protein C (SP-C) or CC10, respective markers of the TII and Clara cell phenotypes, in culture TI cells can be induced to express both SP-C and CC10. Together, the findings that TI cells proliferate and exhibit phenotypic plasticity in vitro raise the possibility that TI cells may have similar properties in vivo.proliferation; stem cells; lung; alveoli; alveolar epithelium THE ALVEOLAR EPITHELIUM, which comprises Ͼ99% of the internal surface area of the lung, is composed of two types of cells, type I (TI) and type II (TII) cells. TI cells are large (50-to 100-m diameter) squamous cells that cover 95-99% of the alveolar surface area (47). TII cells, which cover the remainder of the alveolar surface, are smaller (ϳ10 m in diameter), cuboidal cells best recognized as the source of pulmonary surfactant. The currently accepted paradigm regarding alveolar epithelial cell lineage and differentiation is that TII cells have the capacity to proliferate and transdifferentiate into TI cells, whereas TI cells are terminally differentiated and do not have the capacity to proliferate. This paradigm is based on the classic studies of Evans et al. (14) and Adamson and Bowden (1) who used techniques of autoradiography in oxidant-injured rodent lungs to elucidate the events that occurred during lung injury caused by oxidant gases and repair. Following exposure to oxidant gases, TI cells in terminal bronchiolar locations were damaged, and severely injured TI cells were sloughed from the basement membrane. Some TII cells divided; cell progeny either retained morphological characteristics of TII cells or flattened and spread, acquiring morphological characteristics of TI cells. Although in these studies a small percentage of TI cells took up [3 H]thymidine, it was concluded that the TI cell is "terminally d...