Human alveolar Type 2 epithelium transdifferentiates into metaplastic KRT5+ basal cells during alveolar repair

Understanding differential lineage potential of orthologous stem cells across species can shed light on human disease. Here, utilizing 3D organoids, single cell RNAseq, and xenotransplants, we demonstrate that human alveolar type 2 cells (hAEC2s), unlike murine AEC2s, are multipotent and able to transdifferentiate into KRT5+ basal cells when co-cultured with primary fibroblasts in 3D organoids. Trajectory analyses and immunophenotyping of epithelial progenitors in idiopathic pulmonary fibrosis (IPF) indicate that hAEC2s transdifferentiate into metaplastic basal cells through alveolar-basal intermediate (ABI) cells that we also identify in hAEC2-derived organoids. Modulating hAEC2-intrinsic and niche factors dysregulated in IPF can attenuate metaplastic basal cell transdifferentiation and preserve hAEC2 identity. Finally, hAEC2s transplanted into fibrotic immune-deficient murine lungs engraft as either hAEC2s or differentiated KRT5+ basal cells. Our study indicates that hAEC2s-loss and expansion of alveolar metaplastic basal cells in IPF are causally connected, which would not have been revealed utilizing murine AEC2s as a model. HighlightsO_LIHuman AEC2s transdifferentiate into KRT5+ basal cells when accompanied by primary adult human lung mesenchyme in 3D organoid culture. C_LIO_LIAlterations of hAEC2-intrinsic and niche factors dysregulated in IPF can modify metaplastic hAEC2 transdifferentiation. C_LIO_LIhAEC2s engraft into fibrotic lungs of immune-deficient mice and transdifferentiate into metaplastic basal cells. C_LIO_LITranscriptional trajectory analysis suggests that hAEC2s in IPF gives rise to metaplastic basal cells via alveolar-basal intermediate cells. C_LI