In this study, we describe the isolation and characterization of a population of adult-derived or somatic lung progenitor cells (SLPC) from adult mammalian lung tissue and the promotion of alveolar tissue growth by these cells (both in vitro and in vivo) after seeding onto synthetic polymer scaffolds. After extended in vitro culture, differentiating cells expressed Clara cell 10kDa protein, surfactant protein-C, and cytokeratin but did not form organized structures. When cells were combined with synthetic scaffolds, polyglycolic acid (PGA) or Pluronic F-127 (PF-127), and maintained in vitro or implanted in vivo, they expressed lung-specific markers for Clara cells, pneumocytes, and respiratory epithelium and organized into identifiable pulmonary structures (including those similar to alveoli and terminal bronchi), with evidence of smooth muscle development. Although PGA has been shown to be an excellent polymer for culture of specific cell types in vitro, in vivo culture in an immunocompetent host induced a foreign body response that altered the integrity of the developing lung tissue. Use of PF-127/cell constructs resulted in the development of tissue with less inflammatory reaction. These data suggest that the therapeutic use of engineered tissues requires both the use of specific cell phenotypes, as well as the careful selection of synthetic polymers, to facilitate the assembly of functional tissue.