Epithelial cell organoids have increased opportunities to probe questions on tissue development and disease in vitro and for therapeutic cell transplantation. Despite their potential, current protocols to grow these organoids almost exclusively depend on culture within 3D Matrigel, which limits defined culture conditions, introduces animal components, and results in heterogenous organoids (i.e., shape, size, composition). Here, a method is described that relies on hyaluronic acid hydrogels for the generation and expansion of lung alveolar organoids (alveolospheres). Using synthetic hydrogels with defined chemical and physical properties, humanâinduced pluripotent stem cell (iPSC)âderived alveolar type 2 cells (iAT2s) selfâassemble into alveolospheres and propagate in Matrigelâfree conditions. By engineering predefined microcavities within these hydrogels, the heterogeneity of alveolosphere size and structure is reduced when compared to 3D culture, while maintaining the alveolar type 2 cell fate of human iAT2âderived progenitor cells. This hydrogel system is a facile and accessible system for the culture of iPSCâderived lung progenitors and the method can be expanded to the culture of primary mouse tissue derived AT2 and other epithelial progenitor and stem cell aggregates.