Resident mesenchymal cells (rMCs defined as Cd31NegCd45NegEpcamNeg) control the self-renewal and differentiation of alveolar epithelial type 2 (AT2) stem cells in vitro. The identity of these rMCs is still elusive. Among them, Axin2Pos mesenchymal alveolar niche cells (MANCs), which are expressing Fgf7, have been previously described. We propose that an additional population of rMCs, expressing Fgf10 (called rMC-Sca1PosFgf10Pos) are equally important to maintain AT2 stem cell self-renewal.The alveolosphere model, based on the AT2-rMC co-culture in growth factor reduced Matrigel, was used to test the efficiency of different rMC subpopulations isolated by FACS from adult murine lung to sustain the self-renewal and differentiation of AT2 stem cells.We demonstrate that rMC-Sca1PosFgf10Pos cells are efficient to promote the self-renewal and differentiation of AT2 stem cells. Co-staining of adult lung for Fgf10 mRNA and Sftpc protein respectively, indicate that 28% of Fgf10Pos cells are located close to AT2 cells. Co-ISH for Fgf7 and Fgf10 indicate that these two populations do not significantly overlap. Gene arrays comparing rMC-Sca1PosAxin2Pos and rMC-Sca1PosFgf10Pos support that these two cell subsets express differential markers. In addition, rMC function is decreased in diabetic and obese ob/ob mutant compared to WT mice with a much stronger loss of function in males compared to females.In conclusion, rMC-Sca1PosFgf10Pos cells play important role in supporting AT2 stem cells self-renewal and differentiation. This result sheds a new light on the subpopulations of rMCs contributing to the AT2 stem cell niche in homeostasis and in the context of COVID-19 pathogenesis.Key messageWhat is already known about the subject?Resident mesenchymal cells (rMCs defined as Cd31NegCd45NegEpcamNeg) control the self-renewal and differentiation of alveolar epithelial type 2 (AT2) stem cells in vitro. The identity of these rMCs is still elusive. Among them, Axin2Pos mesenchymal alveolar niche cells (MANCs), which are expressing Fgf7, have been previously described.What does this study add?Our study shows that an additional population of rMCs, expressing Fgf10 (called rMC-Sca1PosFgf10Pos) is equally important to maintain AT2 stem cell self-renewal. rMC-Sca1PosFgf10Pos are LipidToxHigh and are located close to AT2s. In addition, rMC-Sca1PosFgf10Pos cells support AT2 stem cell self-renewal and differentiation thereby identifying these cells as bone fide functional lipofibroblasts (LIFs). We have previously reported that LIF can transdifferentiate into activated MYF in the context of bleomycin-induced fibrosis in mice [1] and that activated MYF isolated from the lungs of end stage idiopathic fibrosis human patients can respond to Metformin to undergo transdifferentiation back to the LIF phenotype [2]. We also show that the function of rMCs-Sca1Pos is negatively impacted by gender and obesity, which represent two major aggravating factors for COVID-19 pathogenesis, leading to either death or major complications after infection recovery such as lung fibrosis.How might this impact on clinical practice and future development?By establishing that rMC-Sca1PosFgf10Pos are different from the MANCs, our study opens the way for a new key mesenchymal cell population that should be targeted to either prevent or reverse fibrosis. In addition, as this population maintains the AT2 stem cells self-renewal and differentiation, such targeting will also allow to progressively recover the loss in respiratory function.