Research discoveries in the fields of stem cell biology and regenerative medicine are beginning to advance and refine our understanding of lung injury and repair. Although these emerging studies offer unprecedented opportunities to develop novel therapies for a variety of lung diseases, the quickening pace of work in this nascent field also makes it difficult to discern hope from hype when addressing the pleas of patients eager for clinical translation or when seeking information on the risk versus reward of participation in clinical trials. This perspective provides an overview of the latest advances in lung-related stem cell research and places the new discoveries in a historical context. Established, lineage-restricted epithelial progenitors of the conducting airways and gas-exchanging alveoli are briefly reviewed, and controversial, newly proposed tissue-specific candidate lung stem/progenitor cells with broader differentiation repertoire are introduced. Exogenous derivation of lung epithelia from embryonic stem cells or induced pluripotent stem cells is also presented as an alternative method for engineering lung tissue de novo in culture.