Resident stem/progenitor cells in the lung are important for tissue homeostasis and repair. However, a progenitor population for alveolar type II (ATII) cells in adult human lungs has not been identified. The aim of this study is to isolate progenitor cells from adult human lungs with the ability to differentiate into ATII cells. We isolated colony-forming cells that had the capability for self-renewal and the potential to generate ATII cells in vitro. These undifferentiated progenitor cells expressed surface markers of mesenchymal stem cells (MSCs) and surfactant proteins associated with ATII cells, such as CD90 and pro-surfactant protein-C (pro-SP-C), respectively. Microarray analyses indicated that transcripts associated with lung development were enriched in the pro-SP-C(+)/CD90(+) cells compared with bone marrow-MSCs. Furthermore, pathological evaluation indicated that pro-SP-C and CD90 double-positive cells were present within alveolar walls in normal lungs, and significantly increased in ATII cell hyperplasias contributing to alveolar epithelial repair in damaged lungs. Our findings demonstrated that adult human lungs contain a progenitor population for ATII cells. This study is a first step toward better understanding of stem cell biology in adult human lung alveoli.