Regenerative medicine has entered a rapid phase of discovery, and much has been learned in recent years about the lung’s response to injury. This article first summarizes the cellular and molecular mechanisms that damage the alveolar-capillary barrier, producing acute respiratory distress syndrome (ARDS). The latest understanding of endogenous repair processes is discussed, highlighting the diversity of lung epithelial progenitor cell populations and their regulation in health and disease. Finally, the past, present, and future of exogenous cell-based therapies for ARDS is reviewed.