Chronic disease results from the failure of tissues to maintain homeostasis. In the lung, coordinated repair of the epithelium is essential for preserving homeostasis. In animal models and human lung disease, airway epithelial cells mobilize in response to lung injury, resulting in the formation of airway-like cysts with persistent loss of functional cell types and parenchymal architecture. Using live-cell imaging of human lung epithelial cultures and mouse precision-cut lung slices, we demonstrated that distal airway epithelia are aberrantly fluidized both after injury and in fibrotic lung disease. Through transcriptomic profiling and pharmacologic stimulation of epithelial cultures, we identified interleukin-6 (IL-6) signaling as a driver of tissue fluidization. This signaling cascade occurred independently of canonical Janus kinase (JAK)-signal transducer and activator of transcription (STAT) signaling but instead was dependent on a downstream SRC family kinase (SFK)-yes-associated protein (YAP) axis. Airway epithelial-fibroblast cocultures revealed that the fibrotic mesenchyme acts as a source of IL-6 family cytokines, which drive airway fluidization. Inhibition of the IL-6-SFK-YAP cascade was sufficient to prevent fluidization in both in vitro and ex vivo models. Last, we demonstrated a reduction in fibrotic lung remodeling in mice through genetic or pharmacologic targeting of IL-6-related signaling. Together, our findings illustrate the critical role of airway epithelial fluidization in coordinating the balance between homeostatic lung repair and fibrotic airspace remodeling.