We and others have shown that epithelial cells lining the airways and the alveoli can be derived from bone marrow progenitor cells. These novel results have yet to be explored from an angle that addresses a functional role for these cells and the conditions that lead to their engraftment in the lung. To define the in vivo potential of bone marrow cells that differentiate into respiratory epithelium, we have designed experiments that combine quantification of engraftment with change in phenotype. We propose to investigate a role for bone marrow derived stem cells as progenitors of functional respiratory epithelium with the goal of using the results to develop novel and effective treatments for diseases of the lung. Specifically, we propose to test whether bone marrow transplantation can transfer a normally functioning gene to congenitally abnormal lungs, whether epithelial apoptosis is necessary for the engraftment of bone marrow cells as type I and type II cells, and whether these donor derived cells can reduce the lung damage associated with increased cell death. Using recipient mice whose pulmonary function is compromised due to knockout of the surfactant C protein, we will test the ability of bone marrow transplantation to confer normal phenotype to genetically abnormal lungs. To clarify the pathophysiology of the recipient lung tissue at the time of BMSC engraftment as epithelial cells, we will assess the necessity for epithelial apoptosis in the process of bone marrow engraftment as pneumocytes, and in order to gain a more fundamental understanding of the bone marrow derived stem cells that are capable of engraftment as epithelial cells, we will determine whether induction of stem cell proliferation is necessary for engraftment as lung epithelium.