Growth and division of type II pulmonary epithelial cells are important components of the pathway by which the alveolar surface is repaired following several forms of lung injury. These processes, which result in reepithelialization of the denuded alveolar basement membrane, involve loss of type II cell differentiation and transition to a type I epithelium. As in other cells, the extracellular matrix appears to be an important determinant of type II cell differentiation. This effect on the type II cell is exerted by both simple and complex matrices and may be modulated by active synthesis and remodeling of the matrix components by the pneumocytes themselves. In general, laminin or laminin-rich complex surfaces favor cellular differentiation; fibronectin or fibronectin-rich complex matrices accelerate loss of differentiated form and function. In both cases, matrix-initiated changes in the type II cell involve regulation of cell shape and morphology, hormone responsiveness, secretory activity, phospholipid synthesis, protein turnover, and gene expression. These influences of the extracellular matrix, along with the effects of locally acting soluble factors, likely direct the cellular transitions required for restoration of a physiologically competent alveolar surface during the repair of lung injury.