Lung Cancer is the leading cause of cancer-related deaths worldwide. This is mainly due to late diagnosis and therefore advanced stage of the disease. Understanding the cell of origin of cancer and the processes that lead to its transformation will allow for earlier diagnosis and more accurate prediction of tumour type, ultimately leading to better treatments and lower patient morbidity. In this review, we focus on alveolar type 2 (AT2) cells as the cell of origin of lung adenocarcinoma (LUAD), the most common type of lung cancer. We first elaborate on the different oncogenes that are associated with LUAD and other lung cancers. After, we lay out in detail what is known about AT2 biology, to further delve into AT2 cells as cell of origin for adenocarcinoma. Understanding the precursors of LUAD and identifying the molecular changes during its progression will allow for earlier detection and better molecular targeting of the disease in early stages.