Human lung tissue is composed of an interconnected network of epithelium, mesenchyme, endothelium, and immune cells from the upper airway of the nasopharynx to the smallest alveolar sac. Interactions between these cells are crucial in lung development and disease, acting as a barrier against harmful chemicals and pathogens. Current in vitro co-culture models utilize immortalized cell lines with different biological backgrounds, which may not accurately represent the cellular milieu or interactions of the lung. We differentiated human iPSCs into 3D lung organoids (containing both epithelium and mesenchyme), endothelial cells, and macrophages. These were co-cultured in an air-liquid interface (ALI) format to form an epithelial/mesenchymal apical barrier invested with macrophages and a basolateral endothelial barrier (iAirway). iPSC-derived iAirways showed a reduction in barrier integrity in response to infection with respiratory viruses and cigarette toxins. This multi-lineage lung co-culture system provides a platform for studying cellular interactions, signaling pathways, and molecular mechanisms underlying lung development, homeostasis, and disease progression. iAirways closely mimic human physiology and cellular interactions, can be generated from patient-derived iPSC's, and can be customized to include different cell types of the airway. Overall, iPSC-derived iAirway models offer a versatile and powerful tool for studying barrier integrity to better understand genetic drivers for disease, pathogen response, immune regulation, and drug discovery or repurposing in vitro, with the potential to advance our understanding and treatment of airway diseases.