Ultrastructural studies were made of the types of alveolar epithelial cells in fibrotic lungs from 34 patients, including 20 with idiopathic pulmonary fibrosis, five with collagen-vascular diseases, six with sarcoidosis, one with lymphangioleiomyomatosis, one with histiocytosis X, and one with chronic eosinophilic pneumonia. In 28 patients, proliferation of type II alveolar epithelial cells was recognized on the basis of lamellar bodies in the cytoplasm, microvilli in the luminal surface, focal microfoldings of the basal plasma membrane, close interaction with underlying mesenchymal cells, and unilayered arrangement. Two types of cuboidal epithelial cells were recognized and were considered to be derived from bronchiolar basal cells (type A cuboidal cells) and from cuboidal cells in respiratory bronchioles (type B cuboidal cells). Type A cuboidal cells frequently contained large numbers of cytoskeletal filaments, and their basal plasma membranes possessed hemidesmosomes in close association with anchoring fibrils. Type B cells lacked hemidesmosomes and anchoring fibrils, Proliferation of either or both types of cuboidal cells was found in 30 patients. In 10 patients (average degree of fibrosis= 3.5 on a scale of 0 to+ 4), the proliferation involved type A cells; in 10 other patients (average degree of fibrosis= 2.5), type B cells in nine patients (average degree of fibrosis= 3.4), both type A and type B cells; in one patient cuboidal cells were identified only by light microscopy. In 17 patients, proliferating cuboidal cells formed foci of epithelial pseudostratification. Type II alveolar epithelial cells did not participate in the process of multilayering. Thus, type II alveolar epithelial cells and two types of cuboidal epithelial cells are sources of epithelial renewal in damaged alveoli in fibrotic lungs. Type II cells proliferate mainly in areas of less severe degrees of fibrosis; cuboidal cells become the main source of epithelial renewal in areas of very severe lung damage.