Mycobacterium tuberculosis (M. tb) infection is initiated by the few bacilli inhaled into the alveolus. Studies in lungs of aerosol-infected mice provided evidence for extensive replication of M. tb in non-migrating, non-antigen-presenting cells in the alveoli during the first 2-3 weeks post-infection. Alveoli are lined by type II and type I alveolar epithelial cells (AEC) which outnumber alveolar macrophages by several hundred-fold. M. tb DNA and viable M. tb have been demonstrated in AEC and other non-macrophage cells of the kidney, liver, and spleen in autopsied tissues from latently-infected subjects from TB-endemic regions indicating systemic bacterial dissemination during primary infection. M. tb have also been demonstrated to replicate rapidly in A549 cells (type II AEC line) and acquire increased invasiveness for endothelial cells. Together, these results suggest that AEC could provide an important niche for bacterial expansion and development of a phenotype that promotes dissemination during primary infection. In the current studies, we have compared the transcriptional profile of M. tb replicating intracellularly in A549 cells to that of M. tb replicating in laboratory broth, by microarray analysis. Genes significantly upregulated during intracellular residence were consistent with an active, replicative, metabolic, and aerobic state, as were genes for tryptophan synthesis and for increased virulence (ESAT-6, and ESAT-6-like genes, esxH, esxJ, esxK, esxP, and esxW). In contrast, significant downregulation of the DevR (DosR) regulon and several hypoxia-induced genes was observed. Stress response genes were either not differentially expressed or were downregulated with the exception of the heat shock response and those induced by low pH. The intra-type II AEC M. tb transcriptome strongly suggests that AEC could provide a safe haven in which M. tb can expand dramatically and disseminate from the lung prior to the elicitation of adaptive immune responses.