Recent advances in stem cell biology provide the conceptual framework for the development of cell-based therapies for life-threatening diseases affecting many organs, including the lung. Because of its complexity and structure, cell-based therapy for the lung faces significant technical challenges. Therapeutic goals span a spectra of expectations that might include: (1) regeneration of functional lung tissue, (2) replacement of specific cells affected by inherited or acquired diseases with genetically altered progenitor cells, (3) provision of cells capable of enhancing repair or influencing oncogenesis directly or indirectly, and (4) introduction of cells capable of expressing therapeutic molecules for local or systemic delivery. The technical hurdles required for accomplishing each of these goals are distinct and of various heights. None are trivial. Knowledge of the cellular and molecular basis for specification and differentiation of stem/progenitor cells will be required for the successful application of cell-based therapies for the lung. This chapter reviews concepts derived from study of lung morphogenesis and repair as well as stem cell biology that will be relevant to the development of novel therapies for pulmonary diseases in the future.