Our current alveolar paradigm includes three highly specialized cell populations. Alveolar type I cells are flat, elongated cells that presumably enable gas exchange. Alveolar type II cells are small, cuboidal cells with metabolic, secretory, progenitor, and immunologic functions. Alveolar fibroblasts secrete extracellular matrix proteins that support alveolar structure. These cells work together to facilitate respiration. Many years of high-quality research have defined our understanding of alveolar biology. However, there is much to be determined about the factors controlling cellular phenotypes and crosstalk. Moreover, specific questions remain regarding origin, repopulation, and previously unrecognized functions of each cell. This article summarizes the current data for each cell type and highlights areas that would benefit from further investigation.