Fibrotic lung injury is often attributed to a myriad of factors, including environmental exposure, age, genetic predisposition, epigenetics, coexisting conditions, acute lung injury, and viral infection. No effective therapies, other than lung transplantation, have proven effective against lung fibrosis. Loss of cellular homeostasis mechanisms in alveolar epithelial type I cells and any inability of type II progenitor cells to resist and repair epithelial injury are indicators that impaired response to injury and regeneration is a critical component of this disorder. The alveolar epithelium has a limited repertoire of responses to injury, which are dictated by the alveolar milieu, a repository of cytokines and growth factors that affect recruitment of other cells to the site of injury, or the proliferation of resident cells at the site of injury. The identification and characterization of the cytokines, growth factors, and other biomarkers that dictate the response to disease is key to understanding, diagnosing, treating, and determining the trajectory of various lung disorders. Corrective therapy of the alveolar milieu may therefore prove to be beneficial in many presently serious and incurable lung diseases that likely begin and progress with injury to the alveolar epithelium.