Research of stem cells has caught much attention in the past few years with its promise for therapeutic and regenerative applications in a variety of diseases and organ systems. The latest studies have also urged us to understand further the somatic stem cell plasticity or transdifferentiation capability. More vigorous research is urgently required to verify whether or not bone marrow stem cells can differentiate into a variety of cell types in different organs including heart, liver, lung, and so forth. The lung employs a myriad of cell phenotypes in its unique function of inhaling and expiring air. Due to this structural complexity, transdifferentiation of stem cells into the lung is particularly complicated. In addition, assessing the stem cells and lung progenitor cells in the respiratory system is technically difficult. Despite these difficulties, recent studies have advanced our understanding of bone marrow stem cells differentiating into lung progenitors as well as characteristics of the local progenitor cells. This review will briefly discuss the current state of research of stem cell transdifferentiation and development, with a focus on the obstacles that limit use of stem cells in lung regeneration.