End-stage lung disease is the third leading cause of death worldwide, accounting for 400,000 deaths per year in the United States alone. To reduce the morbidity and mortality associated with lung disease, new therapeutic strategies aimed at promoting lung repair and increasing the number of donor lungs available for transplantation are being explored. Because of the extreme complexity of this organ, previous attempts at bioengineering functional lungs from fully decellularized or synthetic scaffolds lacking functional vasculature have been largely unsuccessful. An intact vascular network is critical not only for maintaining the blood-gas barrier and allowing for proper graft function but also for supporting the regenerative cells. We therefore developed an airway-specific approach to removing the pulmonary epithelium, while maintaining the viability and function of the vascular endothelium, using a rat model. The resulting vascularized lung grafts supported the attachment and growth of human adult pulmonary cells and stem cell-derived lung-specified epithelial cells. We propose that de-epithelialization of the lung with preservation of intact vasculature could facilitate cell therapy of pulmonary epithelium and enable bioengineering of functional lungs for transplantation.