Over the last decade, several organoid models have evolved to acquire increasing cellular, structural, and functional complexity. Advanced lung organoid platforms derived from various sources, including adult, fetal, and induced pluripotent stem cells, have now been generated, which more closely mimic the cellular architecture found within the airways and alveoli. In this regard, the establishment of novel protocols with optimized stem cell isolation and culture conditions has given rise to an array of models able to study key cellular and molecular players involved in lung injury and repair. In addition, introduction of other nonepithelial cellular components, such as immune, mesenchymal, and endothelial cells, and employment of novel precision gene editing tools have further broadened the range of applications for these systems by providing a microenvironment and/or phenotype closer to the desired in vivo scenario. Thus, these developments in organoid technology have enhanced our ability to model various aspects of lung biology, including pathogenesis of diseases such as chronic obstructive pulmonary disease, pulmonary fibrosis, cystic fibrosis, and infectious disease and host-microbe interactions, in ways that are often difficult to undertake using only in vivo models. In this Review, we summarize the latest developments in lung organoid technology and their applicability for disease modeling and outline their strengths, drawbacks, and potential avenues for future development.