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Lung injury activates quiescent stem and progenitor cells to regenerate alveolar structures. The sequence and coordination of transcriptional programs during this process has largely remained elusive. Using single cell RNA-seq, we first generated a whole-organ bird’s-eye view on cellular dynamics and cell-cell communication networks during mouse lung regeneration from ~30,000 cells at six timepoints. We discovered an injury-specific progenitor cell state characterized by Krt8 in flat epithelial cells covering alveolar surfaces. The number of these cells peaked during fibrogenesis in independent mouse models, as well as in human acute lung injury and fibrosis. Krt8+ alveolar progenitors featured a highly distinct connectome of receptor-ligand pairs with endothelial cells, fibroblasts, and macrophages. To ‘sky dive’ into epithelial differentiation dynamics, we sequenced >30,000 sorted epithelial cells at 18 timepoints and computationally derived cell state trajectories that were validated by lineage tracing genetic reporter mice. Airway stem cells within the club cell lineage and alveolar type-2 cells underwent transcriptional convergence onto the same Krt8+ progenitor cell state, which later resolved by terminal differentiation into alveolar type-1 cells. We derived distinct transcriptional regulators as key switch points in this process and show that induction of NFkB, p53, and hypoxia driven gene expression programs precede a Sox4, Ctnnb1, and Wwtr1 driven commitment towards alveolar type-1 cell fate. We show that epithelial cell plasticity can induce non-gradual transdifferentiation, involving intermediate progenitor cell states that may persist and promote disease if checkpoint signals for terminal differentiation are perturbed.

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