Lung-related diseases are the third-leading cause of human death throughout the world. Lethal lung diseases such as chronic obstructive pulmonary disease (COPD), pulmonary fibrosis and bronchiectasis are characterized by irreversible, progressive damage of the lung tissue. The ability to regenerate human lung tissue, if successful, would constitute a breakthrough in mode medicine. Despite years of research, however, currently there is no effective strategy to regenerate lost bronchioles or alveoli in humans. Stem cell-based regenerative medicine holds great potential for combating tissue damage in lung diseases and other disorders by providing unlimited materials for transplant (Liu et al., 2012; Liu et al., 2014; Wu and Izpisua Belmonte, 2016; Shi et al., 2017; Yang et al., 2017). Induced pluripotent stem cells (iPSCs) could be the source of cells for autologous transplantation. iPSC has been successfully differentiated to alveolar and airway lineage (Huang et al., 2014; McCauley et al., 2017). It remains unknown however, whether these iPSC-derivatives can form lung tissue in vivo, and/or functionally contribute to gas-blood air exchange. In addition, undifferentiated iPSCs in the differentiation culture generate safety conces. On the other hand, somatic stem cells or progenitors—if can be identified, isolated and expanded— could offer a better and safer choice for regenerative medicine.