COVID-19 can be divided into three clinical stages, and one can speculate that these stages correlate with where the infection resides. For the asymptomatic phase, the infection mostly resides in the nose, where it elicits a minimal innate immune response. For the mildly symptomatic phase, the infection is mostly in the pseudostratified epithelium of the larger airways and is accompanied by a more vigorous innate immune response. In the conducting airways, the epithelium can recover from the infection, because the keratin 5 basal cells are spared and they are the progenitor cells for the bronchial epithelium. There may be more severe disease in the bronchioles, where the club cells are likely infected. The devastating third phase is in the gas exchange units of the lung, where ACE2-expressing alveolar type II cells and perhaps type I cells are infected. The loss of type II cells results in respiratory insufficiency due to the loss of pulmonary surfactant, alveolar flooding, and possible loss of normal repair, since type II cells are the progenitors of type I cells. The loss of type I and type II cells will also block normal active resorption of alveolar fluid. Subsequent endothelial damage leads to transudation of plasma proteins, formation of hyaline membranes, and an inflammatory exudate, characteristic of ARDS. Repair might be normal, but if the type II cells are severely damaged alternative pathways for epithelial repair may be activated, which would result in some residual lung disease.