Diffuse lung disease (DLD), also known as interstitial lung disease (ILD), comprises a group of relatively rare but devastating lung diseases that involve varying degrees of acute and chronic inflammation, and which may present with end-stage fibroproliferation. There are currently no proven therapeutic strategies to halt progression of DLDs. Thinking about DLDs has evolved over time from hypotheses invoking inflammation as the prime mover in the etiology of disease, to the current hypothesis that interactions between a damaged and frustrated epithelium, and the response of underlying mesenchymal cells that takes place, contribute to the fibroproliferative milieu. The greatest challenge to understanding the role of environmental exposures in pathogenesis of DLDs is that there is no clear consensus on the etiology and pathogenesis of these diseases. Emerging data on the relationship between loss of epithelial integrity and mesenchymal fibroproliferation support the hypothesis that the damage to the epithelium is a critical component in the development of DLDs that progress to a fibroproliferative presentation. Thus it follows that environmental stress which impacts the well-being of the epithelium may play a critical role in shifting the balance of lung homeostasis through ongoing insult as a result of exposure to environmental agents. Animal models that recapitulate the vulnerable epithelium observed in patients who develop fibrotic lung disease associated with DLDs will provide the best opportunity to understand mechanisms associated with the etiology of these diseases.