Numerous studies using morphologic techniques have demonstrated the plasticity of pulmonary epithelial cells and the requirement for complex intercellular interactions for regeneration of normal epithelium following lung injury. Recent developments in the molecular characterization of genes expressed in the lung have generated additional tools for evaluation of lung cell phenotypes and interactions. This review discusses the relationship between molecular and morphologic changes in lung cells during injury and repair. Changes in epithelial morphology and their differentiated gene products may be mediated through alterations in expression of numerous factors acting through paracrine and autocrine mechanisms. Tumor necrosis factor alpha, transforming growth factor beta, and retinoic acid, whose roles in the regulation of epithelial cell differentiation have been well documented, will be discussed in the context of normal lung development and repair from injury.