Idiopathic pulmonary fibrosis (IPF) is a progressive interstitial lung disease with high morbidity and mortality. The cellular source of the fibrotic process is currently under debate with one suggested mechanism being epithelial-to-mesenchymal transition (EMT) in the alveolar region. In this study, we show that airway epithelium overlying fibroblastic foci in IPF contains a layer of p63-positive basal cells while lacking ciliated and goblet cells. This basal epithelium shows increased expression of CK14, Vimentin and N-cadherin while retaining E-cadherin. The underlying fibroblastic foci shows both E-and N-cadherin-positive cells. To determine if p63-positive basal cells were able to undergo EMT in culture, we treated VA10, a p63-positive basal cell line, with the serum replacement UltroserG. A sub-population of treated cells acquired a mesenchymal phenotype, including an E-to N-cadherin switch. After isolation, these cells portrayed a phenotype presenting major hallmarks of EMT (loss of epithelial markers, gain of mesenchymal markers, increased migration and anchorage-independent growth). This phenotypic switch was prevented in p63 knockdown (KD) cells. In conclusion, we show that airway epithelium overlying fibroblastic foci in IPF lacks its characteristic functional identity, shows increased reactivity of basal cells and acquisition of a partial EMT phenotype. This study suggests that some p63-positive basal cells are prone to phenotypic changes and could act as EMT progenitors in IPF.