key: cord-0026990-l0k3jyxw authors: Tran, Evelyn; Shi, Tuo; Li, Xiuwen; Chowdhury, Adnan Y.; Jiang, Du; Liu, Yixin; Wang, Hongjun; Yan, Chunli; Wallace, William D.; Lu, Rong; Ryan, Amy L.; Marconett, Crystal N.; Zhou, Beiyun; Borok, Zea; Offringa, Ite A. title: Development of human alveolar epithelial cell models to study distal lung biology and disease date: 2022-01-15 journal: iScience DOI: 10.1016/j.isci.2022.103780 sha: e05d4b956ff3ca3f80d91dd95618a30a70efea30 doc_id: 26990 cord_uid: l0k3jyxw Many acute and chronic diseases affect the distal lung alveoli. Alveolar epithelial cell (AEC) lines are needed to better model these diseases. We used de-identified human remnant transplant lungs to develop a method to establish AEC lines. The lines grow well in 2-dimensional (2D) culture as epithelial monolayers expressing lung progenitor markers. In 3-dimensional (3D) culture with fibroblasts, Matrigel, and specific media conditions, the cells form alveolar-like organoids expressing mature AEC markers including aquaporin 5 (AQP5), G-protein-coupled receptor class C group 5 member A (GPRC5A), and surface marker HTII280. Single-cell RNA sequencing of an AEC line in 2D versus 3D culture revealed increased cellular heterogeneity and induction of cytokine and lipoprotein signaling in 3D organoids. Our approach yields lung progenitor lines that retain the ability to differentiate along the alveolar cell lineage despite long-term expansion and provides a valuable system to model and study the distal lung in vitro. Human AT2 cells grown in Y-27632 medium are immortalized by SV40 Large T antigen Immortalized AT2 cells are SOX9 + /SOX2 + in the absence of mature alveolar markers Immortalized AT2 cells form NKX2-1 + /AQP5 + / GPRC5A + organoids in 3D culture Specific 3D culture conditions induce AT2 marker HTII280 expression in organoids Diseases affecting the distal lung, including lung cancer, chronic obstructive pulmonary disease (COPD), idiopathic pulmonary fibrosis (IPF), and pulmonary viral infections are a significant health burden across communities worldwide. In the United States, lung cancer is still the leading cause of cancer-related deaths (Siegel et al., 2020) , and chronic lower respiratory diseases account for approximately 5.7% of all deaths (Centers for Disease Control and Prevention, 2018) . Because of the susceptibility of the distal lung to severe damage, and public health concerns regarding long-term effects of prior lung damage, there is an urgent need to generate in vitro models to study mechanisms underlying distal lung diseases. Such models would facilitate screening for novel therapeutics. The distal lung encompasses saccular respiratory units called alveoli. Alveoli are composed of two epithelial cell types: cuboidal alveolar type 2 cells (AT2) responsible for producing and secreting surfactant, and large, delicate type 1 cells (AT1) enveloped by a network of capillaries that mediate gas exchange (Rackley and Stripp, 2012; Rock and Hogan, 2011; Tata and Rajagopal, 2017) . AT2 cells have been extensively investigated due to their role as stem cells in the regeneration of damaged lung epithelium (Barkauskas et al., 2013; Khalil et al., 1994; Liu et al., 2011) . AT2 cells can proliferate or differentiate into AT1 cells in response to lung injury (Adamson and Bowden, 1974; Beers and Morrisey, 2011; Evans and Bils, 1969) . AT1 cells have been less extensively studied due to the difficulty in purifying and culturing these fragile cells. Initially, AT1 cells were thought to be terminally differentiated (Evans and Hackney, 1972; Hackney et al., 1975) . However, it is now suggested that AT1 cells, or at least a subpopulation thereof, may have the ability to reenter the cell cycle and differentiate into AT2 cells (Borok et al., 1998; Jain et al., 2015; Little et al., 2019; Wang et al., 2018; Yang et al., 2016) . Therefore, AT1 cells may also play a role in alveolar regeneration. In the last 30 years, numerous human lung cell lines have been used to study lung disease and homeostasis in vitro. The most common cell models available are immortalized airway epithelial cells established using viral and non-viral immortalization methods to overcome cellular senescence and crisis Herranz and Gil, 2018; Reddel, 2000) , such as BEAS-2B cells immortalized by simian virus 40 large T antigen (SV40 LgT) transduction (Reddel et al., 1988; Schiller et al., 1994) and human bronchial epithelial cell (HBEC) and small airway epithelial cell (SAEC) lines immortalized by overexpression of Here, we report the establishment and characterization of a collection of immortalized cell lines derived from isolated adult human AT2 cells. Under 2D culture conditions, the cells grow as an epithelial monolayer and exhibit lung-progenitor-like expression patterns. In 3D organotypic culture, they form diverse organoid structures and express mature AEC markers, AQP5 and GPRC5A. Under specific 3D medium conditions, a subpopulation of cells can be induced to express the AT2 cell membrane marker, HTII280. Cell lines derived from the alveolar epithelium are urgently needed for the study of diseases arising from lung alveoli. Our novel alveolar epithelial-derived distal lung cell lines provide a new resource for studying genetic and environmental mechanisms underlying distal lung diseases as well as for investigating the regulation of alveolar epithelial cell homeostasis. Primary human AECs do not proliferate in culture (Isakson et al., 2002; Mao et al., 2015) , making them challenging to manipulate and limiting their suitability for in vitro modeling. We initially attempted direct transduction of both freshly isolated and previously cryopreserved human AT2 cells with lentiviruses carrying CDK4 R24C and hTERT based on reported success in human bronchial epithelial cells (Ramirez et al., 2004) . Although this approach resulted in early proliferation of cells, it was followed by either growth arrest or adoption of a fibroblast-like morphology at later passages (Figures S1A-S1C). Repeat transduction of seemingly growth-arrested cells with SV40 LgT resulted in fibroblast-like cells ( Figure S1A , last panel). Failure to derive proliferating AECs by direct transduction motivated us to refine our immortalization strategy. In culture, AT2 cells spontaneously transdifferentiate into AT1-like cells over the course of 6 days (Cheek et al., 1989; Dobbs, 1990; Foster et al., 2007; Fuchs et al., 2003; Marconett et al., 2013) . These AT1-like cells have attenuated cell bodies and a high overall surface area, similar to AT1 cells in vivo. We considered that our failure to immortalize primary AECs by direct transduction with lentiviruses carrying immortalizing genes might be because cells were not proliferating and thus not molecularly responsive to mutant CDK4 and hTERT. In the literature, we found that successful immortalization appeared to be possible for purified primary human cells exhibiting at least some proliferative capacity (Herbert et al., 2002; O'Hare et al., 2001) . Indeed, primary human bronchial epithelial cells were first subcultured before immortalization with retroviruses (Ramirez et al., 2004) . We therefore hypothesized that successful immortalization of primary AECs would require first stimulating the cells to proliferate in culture, then transducing the dividing cells with lentiviruses carrying immortalizing genes ( Figure S1D ). We performed a small-scale screen of media containing growth factors and small molecules using previously cryopreserved isolated human AT2 cells from one de-identified human lung from a deceased subject (Lung-FT, Tables 1 and S1). After several weeks, visual inspection indicated that medium containing 10 mM ll OPEN ACCESS AEC lines proliferate in culture but do not form tumors in nude mice We next characterized the proliferative ability of our AEC lines. As a reference for a highly proliferative cell line presumed to be derived from alveolar epithelium, we used the human lung adenocarcinoma cell line, A549 (Giard et al., 1973) . We found that AEC-FT cells proliferated almost as well as A549 cells ( Figure 1D ). All other FT-derived AEC lines exhibited an extended lag phase ( Figure 1D ). The growth potential of other FT-derived cells was not improved by seeding them at higher densities (Table S2) . When seeded at low density, AEC-ON and AEC-TN cell lines grew slower than the AEC-FT line, but when plated at higher density, both cell lines proliferated readily ( Figure 1E ), reaching exponential growth 4 days after plating, with a population doubling time (PDT) of $1 day for AEC-ON and $2 days for AEC-TN cells (Table S2) . These results indicate that the presence of SV40 LgT stimulates the growth potential of AECs in ways that CDK4 R24C + hTERT cannot. BEAS-2B cells, derived from bronchial epithelial cells immortalized with SV40 LgT, exhibit anchorage independent growth (a common hallmark of cancer cells), but do not form tumors in immunocompromised (nude) mice. We therefore examined the AEC lines for these properties. Anchorage-independent growth is commonly tested by the ability of cells to form colonies in soft agar. We performed soft agar assays on all AEC lines, using A549 tumor cells as a positive control. Only AEC-FT cells consistently generated soft agar colonies (246 G 55 colonies per well), comparable to A549 cells (284 G 186 colonies, p value = 0.78, nonparametric Wilcoxon test) ( Figure 1G ). AEC-ON and AEC-TN cells formed rare small colonies visible under 10X brightfield magnification ( Figure 1F , inset). Quantification of colonies yielded 2 G 1 colonies per well for AEC-ON cells and 3 G 2 colonies for AEC-TN, which was statistically significantly different iScience Article from A549 cells (p = 1.4 3 10 À7 and p = 1.5 3 10 À7 , respectively, nonparametric Wilcoxon test) ( Figure 1G ). We next tested the ability of the AEC lines to form tumors in immunocompromised mice, again using A549 cells as a positive control. We subcutaneously injected the three AEC-LgT lines (AEC-FT, AEC-ON, AEC-TN) into the flanks of nude mice. After 3 months, mice transplanted with A549 cells and AEC-ON cells displayed prominent nodules ( Figure 1H ). Excised nodules were evaluated by an expert pathologist blind to sample identities. A549-derived nodules were solid tumors of adenocarcinoma histology, whereas AEC-ON-derived nodules were nonmalignant, fluid-filled cysts lined by a simple epithelium with areas of pseudostratified cells ( Figure 1I ). In one case (1 out of 8 flanks), AEC-TN cells formed a nodule less than 20 mm 3 that was too small to resect. This nodule did not significantly change in volume during the 3-month experimental period ( Figure 1J ). Neither AEC-FT nor negative control AEC-hTERT cells formed nodules. Taken together, although SV40 LgT transduction conferred cell immortality, it did not appear to induce malignant transformation. To determine how similar the transcriptomic identities of our novel AEC lines were to their parental purified primary AECs, we performed comparative expression analyses using paired-end RNA-sequencing (RNAseq). We also compared our AEC lines with lung fibroblasts to test for epithelial-to-mesenchymal transition gene signatures, as well as with LUAD cancer cell lines to determine if our novel cells bore transcriptional hallmarks of oncogenic transformation. We used RNA-seq data generated in-house as well as data from lung fibroblasts and LUAD cancer cell lines from the publicly available databases ENCODE (ENCODE: https://www.encodeproject.org, Davis et al., 2018) and DBTSS (DBTSS: https://dbtss.hgc.jp, Suzuki et al., 2018) , analyzing a total of 42 samples (Table S3) . We performed Principal Component Analysis (PCA) and sample-sample distance matrix analyses using the top 500 most variable genes across the data set. Our analyses showed six clusters: lung fibroblasts, all AEC lines from Lung-FT, the biological replicate AEC-LgT lines from Lung-ON and -TN, fetal lung tissue, LUAD cancer lines, and primary AECs ( Figure 2A ). Human fetal lung tissue clustered away from all samples. Although the biological replicate lines AEC-ON and AEC-TN were generated by transduction of SV40 LgT in a similar fashion to AEC-FT cells, these two lines clustered separately from the collection of ROCKinh-derived cells from Lung-FT. Thirty-nine percent of the variation in data divided the sample set into clusters containing long-term cultured cells (LUAD, fibroblasts, AEC lines) and the other cells (primary AECs and fetal lung tissue), underlining the possible effects of growing cells in culture. Groups identified in the sample distance matrix were generally in agreement with the PCA analysis; however, lung fibroblasts were found to be grouped in a distinct cluster from AEC lines based on dissimilarity calculations represented by a dendrogram tree ( Figures 2B and S2 ). To determine which genes drive segregation of the different sample clusters, we performed unsupervised hierarchical clustering using the top 500 most variable genes across the data set. Primary AECs and fetal lung tissue were more related to each other than to the remaining groups of samples ( Figure 2C ). Nine distinct gene clusters were identified. Most of the clusters had at least one Gene Ontology (GO) term related to tissue development, morphogenesis, and cellular response to the environment (Table S4 ). Inspection of the differences in overall gene expression across the sample types (fetal lung tissue, primary AT2, in-vitro-derived AT1-like, AEC lines, lung fibroblasts, and LUAD) revealed a group of genes contained in gene clusters A, B, and C with higher expression in non-cancer samples compared with LUAD samples ( Figure 2C , dashed box) and associated GO terms ''surfactant homeostasis,'' ''regulation of immune system process,'' ''response to external biotic stimuli,'' and ''tube development'' ( Figure 2D and Table S5 ). We next performed differential gene expression analyses between the AEC lines and each of the other groups: AT2 cells, AT1-like cells, lung fibroblasts, and LUAD cancer lines ( Figures 2E-2H ). The largest iScience Article number of differentially expressed genes (DEGs) (14,404) resulted from comparing the AEC lines with primary AT2 cells ( Figure 2E ) and the fewest number of DEGs (4,918) resulted from comparing the AEC lines with lung fibroblasts ( Figure 2G ). When comparing AEC lines with LUAD cancer lines, we found the fold change values of resulting DEGs were orders of magnitude more significant than DEG fold changes from any other pairwise comparison ( Figures 2E-2H ). This corroborates our tumorigenicity data showing that the AEC lines, although genetically manipulated, remained distinct from transformed cancer cells. GO terms of the top upregulated and downregulated genes from each pairwise comparison revealed significant alterations in cell adhesion, matrix deposition, cell signaling, and metabolism, reinforcing our experimental findings that the AEC lines are morphologically different from and highly proliferative compared with primary AECs, while still distinguishable from cancer-derived cell lines ( Figures 2I-2L ). Because the AEC lines appeared to be transcriptomically more similar to lung fibroblasts than to primary AECs, suggesting a possible loss in lung epithelial cell specificity and adoption of a more mesenchymal phenotype, we performed clustering on a subset of 75 lung-related genes manually curated from published RNA-seq data (Treutlein et al., 2014; Xu et al., 2016 ) ( Figure S3A ). As expected from our genomewide transcriptomic analyses, expression of these lung-related genes was low in the AEC lines compared with isolated primary AECs ( Figure S3A ), but remarkably higher when compared with lung fibroblasts (Figure S3B) , suggesting that the similarity between the AEC lines and fibroblasts calculated by PCA analysis could be driven by the fact that fibroblasts are the only other cell type that was non-cancer, of normal ploidy, and cultured on plastic. Y-27632 is a commonly used small molecule to promote stem cell survival and proliferation (Claassen et al., 2009; Vernardis et al., 2017) . Combined with feeder cells, it has been shown to enhance culturing of primary epithelial cells from mammary, prostate, and upper airway lung tissues . However, in this process of facilitating cell survival, adult cells are reprogrammed to a stem-like state (Suprynowicz et al., 2012) . In the mouse lung, SOX9 regulates distal lung cell fate, committing early cells to an alveolar epithelial cell lineage (Chang et al., 2013; Rockich et al., 2013) , whereas SOX2 is an important regulator of proximal lung cell fate, committing early lung stem cells to the basal cell lineage (Daniely et al., 2004; Ochieng et al., 2014) . In the human lung, progenitor cells located at budding distal epithelial tips during fetal lung development co-express SOX9 and SOX2 (Danopoulos et al., 2018; Nikoli c et al., 2017) . We therefore assessed SOX9 and SOX2 expression in the three AEC-LgT lines by immunofluorescence (IF) staining, finding all three lines positive for these progenitor markers ( Figure 3A ). Indeed, the AEC lines, as a group, expressed both SOX9 and SOX2 at the RNA level more highly than primary AECs ( Figure S4 ). We further examined the expression of mature lung markers by immunostaining, finding all three AEC-LgT lines negative for mature AT1 cell markers AQP5 and HOP homeobox (HOPX) and AT2 cell marker pro-surfactant protein C (pro-SFTPC). AEC-FT and AEC-TN cells were negative for lung epithelial marker NK2 Homeobox 1 (NKX2-1), whereas AEC-ON cells expressed NKX2-1, although at variable levels across the cell population ( Figure 3B ). Notably, although NKX2-1 regulates expression of the AT2 cell marker SFTPC (Kelly et al., 1996) , we did not detect expression of SFTPC in AEC-ON cells, as indicated by its precursor iScience Article protein, pro-SFTPC. Taking our transcriptomic analyses and IF staining data together, we speculated that AEC-LgT cells in 2D culture favored a transcriptional program promoting cell proliferation and cell survival over one specifying alveolar epithelial cell lineage and perhaps represent a more immature precursor rather than fully differentiated AT2/AT1 cells. We therefore investigated whether AEC-LgT cells could be induced to differentiate to a phenotype resembling human adult AECs in 3D culture. Purified AT2 cells from mouse and human lungs form organoids when co-cultured with stromal cells and suspended in Matrigel ( Barkauskas et al., 2013; Jain et al., 2015; Zacharias et al., 2018; Zhou et al., 2018) . To determine whether AEC-LgT cells possess the ability to form 3D structures, we mixed exponentially growing AEC-FT, AEC-ON, and AEC-TN cells with neonatal mouse lung fibroblasts (MLg) in Matrigel on Transwell inserts ( Figure 4A ). All three cell lines formed organoids from a single-cell suspension ( Figure 4F ). We noted that the rates of organoid formation for the three AEC-LgT cell lines did not coincide with their rates of proliferation in 2D culture, suggesting this structural change was not merely determined by cell division. To quantitatively characterize organoid growth of the AEC-LgT lines, we calculated organoid formation efficiency and size after 2 months of culture. The mean organoid formation efficiency varied and was highest for AEC-ON cells ( Figure 4D ). The range of sphere sizes also varied, with AEC-ON cells showing the highest median sphere size (108 mm) ( Figure 4E and Table S6 ). Organoid shapes were variable across cultures for each AEC-LgT line. However, general growth patterns were observed. Under brightfield microscopy, AEC-FT cells formed organoids of predominantly round morphology with a single lumen ( Figure 4F ). Occasionally, across different 3D cultures of these cells, organoids containing multiple lumens were observed ( Figure S6A ). AEC-ON organoids were more heterogeneous in morphology. A subpopulation of them were large and floret-like, exhibiting an intricate lobulated structure ( Figures 4G and S6B ). AEC-TN cells formed rounded, single lumen organoids more commonly than multilumen organoids. However, when present, the multilumen organoids appeared more complex in structure than those from AEC-FT cells but less complex than those from the AEC-ON cells ( Figure S6C ). All three AEC-LgT cell lines formed organoids in 3D culture, an ability well documented in primary mouse and human AT2 cells grown under similar conditions. However, AT2-cell-derived organoids tend to be relatively dense with a small central lumen (Barkauskas et al., 2013; Zacharias et al., 2018; Zhou et al., 2018) . AEC-LgT cell organoids, in contrast, were more reminiscent of organoids formed by multipotent distal tip progenitors (Nikoli c et al., 2017) , having marked spherical to lobulated morphologies and large lumens. To determine whether this morphological behavior was accompanied by changes in lung-specific marker expression, we performed IF staining for mature alveolar markers on organoid sections. Organoids were composed of SV40 LgT + /ECAD + /Ki67 + proliferative epithelial cells ( Figures 4F-4H ). Upon probing for mature alveolar markers (NKX2-1, pro-SFTPC, AQP5, HOPX), we found that all organoids robustly expressed AQP5 and NKX2-1, whereas HOPX expression was variable ( Figures 4F-4H) , and pro-SFTPC was negative ( Figure S7A ). The commonly used AT2-cell-specific surface marker, HTII280, was also negative Table S6 . iScience Article across all lines ( Figures S7B and S7C ). We also probed for the newly identified AT1 marker, GPRC5A (Horie et al., 2020) , finding that all three AEC-LgT organoids possessed GPRC5A + cells specifically along the apical lining of the lumens ( Figure S7C ), in contrast to the ubiquitous GPRC5A expression observed in all three monolayer cultures ( Figure S7B ). In AEC-FT ( Figure 4F ) and AEC-TN organoids ( Figure 4H ), 3D co-culture conditions appeared to reactivate AQP5 and NKX2-1 expression from their silenced state in 2D culture, whereas AEC-ON cells maintained NKX2-1 expression in both 2D and 3D cultures and expressed AQP5 only in 3D culture ( Figure 4G ). Notably, the 3D culture conditions did not seem to induce such marked changes when applied to AEC-LgT cells grown as monolayers (Table S7 ), suggesting that the suspension of cells in a matrix aids in induction of a more lung-like phenotype and expression profile. As shown in Figure 4G , AEC-ON organoids exhibited the most dramatic morphologies and marked expression of the AT1-enriched gene AQP5, whereas the AT2 cell marker SFTPC was not expressed, despite the presence of its upstream regulator NKX2-1. Currently, purified primary human AT2 cells have been shown to form organoids; as of yet, the same ability has not been reported for human AT1 cells. Because AEC-ON cells may possess expression profiles of AT2 and AT1 cells that are too nuanced to detect by IF staining, we investigated the transcriptomes of these cells grown in 2D and 3D by single-cell RNA-sequencing (scRNAseq). In parallel, AEC-ON cells grown in 2D and 3D were FACS sorted for GFP positivity to capture only SV40 LgT + cells and then processed using the 103 Genomics Chromium platform ( Figure 5A ). AEC-ON cells grown under standard 2D conditions clustered separately from cells comprising lung organoids (Figure 5B, left) . Cluster analyses revealed 7 distinct groups: one cluster (Cluster 0) encompassed all 2D cells and the remaining clusters (Cluster 1-6) were identified in the 3D sample, indicating increased cellular heterogeneity among cells comprising AEC-ON organoids versus cells in the monolayer population (Figure 5B, right and 5C). To determine the set of marker genes distinguishing each called cluster, we performed differential gene expression analysis. Figure 5D shows a heatmap indicating the top 20 genes in each cluster ranked by average Log 2 Fold Change over all cells. Associated GO terms for the top 50 genes ordered by p value are shown in Figure 5E . For Cluster 5, GO analysis was performed on the top 75 genes, because the top 50 genes yielded no statistically significant results. Cluster 0, containing all cells from the 2D sample, showed marked enrichment for genes associated with cell adhesion processes, consistent with cell growth as a monolayer (Figure 5E ). Cluster 2 was enriched with cell cycling genes, representing actively proliferating cells within AEC-ON organoids. The remaining clusters (1, (3) (4) (5) (6) were enriched in genes associated with response to external stimuli such as immune response, inflammation, and type 1 interferon signaling, suggesting that cells interacted with the surrounding microenvironment by secreting cytokines and lipoproteins. Clusters 1 and 3-5 were also significantly enriched for genes involved in development, morphogenesis, and epithelial cell differentiation, consistent with structural changes required for organoid formation ( Figure 5E ). Feature maps of marker genes representative of AT2 cells, AT1 cells, and alveolar epithelial progenitor (AEP) cells (Zacharias et al., 2018) revealed a higher proportion of positive cells in 3D organoids than in 2D cultured cells ( Figures 5F-5H) . Examining the AT2 cell panels, we observed numerous cells in the 3D sample expressing ABCA3 and LAMP3, encoding markers of specialized organelles in AT2 cells called lamellar bodies, where surfactant is produced and stored. Consistent with expression of these genes, we detected several cells expressing surfactant proteins A2 (SFTPA2), B (SFTPB), and D (SFTPD) ( Figure 5F ). Based on scRNA-seq data from purified human lung cells, mRNA expression of LAMP3 and SFTPA2 is iScience Article highly AT2-cell-specific (Adams et al., 2020) . We did not observe a significant number of cells expressing SFTPC, which is exclusively produced by AT2 cells. Examining the plots of AT1-enriched markers, we found that cells comprising the organoids highly expressed transcripts of the actin-binding gene LMO7 and, to a lesser extent, the chloride channel gene CLIC5 but expressed AQP5 at a lower level than expected from our IF staining ( Figure 5G) . At the protein level, AQP5 is highly AT1-cell-specific, although in human lung scRNA-seq data, AQP5 RNA is not highly expressed in AT1 cells (Adams et al., 2020; Habermann et al., 2020; Morse et al., 2018; Reyfman et al., 2019) . In AT2 to AT1 in vitro transdifferentiation experiments using purified human AT2 cells, derived AT1-like cells clearly expressed AQP5 protein, although RNA levels were quite low (Marconett et al., 2013) . Our inability to detect AQP5 at the mRNA level may thus be due to insufficient transcript capture rate. The challenge in detecting the full transcript complement of each cell in scRNA-seq data may lead to an underestimate of the actual cell distribution. Overall, the mixed population of organoid cells expressing AT2-and AT1-cell-associated genes suggests a very limited presence of AT2 cells and the possible presence of immature AT2-like cells or an AT2-AT1 intermediate cell type (Liebler et al., 2016) . AEPs were previously found to highly express the surface marker TM4SF1 and the cytoplasmic protein AXIN2 and to be WNT-and FGF-responsive (Zacharias et al., 2018) . Compared with cells grown in 2D, we found a number of AEC-ON cells in 3D expressing AXIN2 and a much greater proportion expressing TM4SF1. In addition, AEC-ON cells expressed genes of the WNT (TCF12, LEF1, and CTNNB1) and FGF pathways (FGFR2) ( Figure 5H ). We examined lung-related transcription factor expression in AEC-ON cells in 2D versus 3D, finding a higher number of cells expressing NKX2-1, GATA6, FOXA1, FOXA2, and CEBPA in 3D than in 2D. SOX2 and SOX9 were also highly expressed in 3D samples ( Figure 5I ). Since AEC-ON organoids contained AEP-like cells expressing genes related to WNT and FGF pathways, we investigated whether activation of these pathways can modulate organoid growth characteristics. We treated AEC-LgT 3D cultures with the glycogen synthase kinase 3 (GSK3) inhibitor, CHIR99021 (CHIR), or a mixture of fibroblast growth factor 7 (FGF7) and FGF10 protein ligands (FGF7+10). GSK3 negatively regulates the WNT/b-catenin pathway by maintaining the phosphorylation state of b-catenin (Wu and Pan, 2010; Little et al., 2021) ; inhibition of GSK3 activity therefore results in activation of WNT signaling. FGF7 and 10 are growth factors that promote differentiation and maintenance of alveolar epithelium (Zhang et al., 2004) . After 2 months, treatment of AEC-ON cultures with either CHIR or FGF7+10 resulted in about a $2-fold increase in sphere size ( Figures S8D and S8E) , whereas sphere formation efficiencies did not change ( Figure S8F ). In contrast, sphere size did not change for either AEC-FT nor AEC-TN cells upon treatment ( Figures S8A, S8B , S8G, and S8H), whereas FGF7+10 treatment of AEC-FT cells increased sphere formation efficiency by $2-fold (p value = 0.03) ( Figure S8C ). Table S8 summarizes the growth metrics for the treatment study. We then ascertained whether modulation of WNT signaling in AEC-ON cells resulted in concomitant changes in AEC marker expression by IF staining. No change in expression of AT1 cell markers AQP5 and GPRC5A nor induction of AT2 cells markers pro-SFTPC, mature SFTPC, and HTII280 was detected (data not shown). Moreover, increasing the dose of CHIR treatment of AEC-ON cells did not result in changes in AEC marker expression (data not shown), despite significant increases in overall sphere size ( Figure S9 ). In sum, we found that changes in sphere size did not correlate with changes in sphere formation efficiency and that, although AEC-ON organoids were WNT-and FGF-responsive, activation of these signaling pathways was not sufficient to induce robust expression of AT2 markers. We therefore speculated that AEC-ON cells may be more akin to a reprogrammed alveolar epithelial cell that is primed to mature under proper microenvironmental conditions, rather than a defined alveolar progenitor cell type, such as AEPs. Activation of WNT, FGF, and glucocorticoid signaling induces HTII280 expression Isolated AT2 cells are known to lose expression of cell-type-specific markers such as SFTPC and HTII280 when cultured in vitro (Dobbs et al., 1985; Gonzalez et al., 2010) . Identification of crucial alveolar epithelial cell lineage pathways during lung development have resulted in improved methods for maintaining or inducing an AT2 cell phenotype in vitro (Gonzales et al., 2001; Nikoli c et al., 2017; Jacob et al., 2017; Katsura et al., 2020) . In particular, stimulating glucocorticoid and cyclic adenosine monophosphate (cAMP) pathways by the addition of dexamethasone, cAMP, and the phosphodiesterase inhibitor 3-isobutyl-1-methylxanthine (IBMX), together called ''DCI,'' has been shown to induce and maintain surfactant production, a hallmark of AT2 cells (Ballard and Ballard, 1974; Gonzales et al., 2002) . In 2D, compared with standard 2D culture medium (''Fmed + ROCKinh''), Nikoli c and Jacob Alveolar media supported AEC-ON cell survival and proliferation ( Figure 6A ). In contrast, Jacob Progen medium resulted in widespread cell death ( Figure 6A ). In the two media conditions supporting 2D cell growth, cells did not express HTII280, pro-SFTPC, nor AQP5, but did maintain GPRC5A expression ( Figure S10B ). AEC-ON cells expressed NKX2-1 in standard Fmed + ROCKinh medium; however, when cultured in Nikoli c and Jacob Alveolar media, NKX2-1 localization was greatly altered. We detected cytoplasmic expression of NKX2-1 in Nikoli c medium ( Figure 6B , asterisk) and a mix of localized nuclear expression and general cytoplasmic expression of NKX2-1 across cells grown in Jacob Alveolar medium ( Figure 6B , arrow and asterisk). Under 3D co-culture conditions, AEC-ON cells grown with Nikoli c, Jacob Progen, and Jacob Alveolar media survived ( Figure 6C ). Nikoli c and Jacob Alveolar media conditions increased organoid formation efficiency by at least 2-fold (p = 0.028) and statistically significantly increased median size of AEC-ON organoids from 103 mm to 167 and 234 mm, respectively (p < 2.2 3 10 À16 ) ( Figures 6D, 6E , and Table S9 ). In addition to their larger sizes, the organoids formed in Nikoli c and Jacob Alveolar media were generally more spherical in structure compared with AEC-ON organoids formed in control SB Basic medium, which were characteristically lobulated and floret-like in shape ( Figure 6C ). Although Jacob Progen medium also supported greater organoid formation efficiency (from 2.3%-4.9%), organoids that formed were dramatically smaller (median size 55 mm, range 23-164 mm) and appeared to resemble cell clusters more than lumen-containing structures ( Figures 6C-6E ). Because Nikoli c and Jacob Alveolar media significantly improved AEC-ON organoid growth, we next determined whether each resulted in changes to AT1 or AT2 cell marker expression by IF staining. As shown in Figure 6F , AQP5 expression was maintained under both Nikoli c and Jacob Alveolar conditions but appeared to be expressed in the cytoplasm rather than at the membrane. In particular, although we were able to detect enrichment of AQP5 expression on the luminal side of the membrane of AEC-ON organoids grown under control 3D medium, we did not observe this localization pattern in either Nikoli c-nor Jacob Alveolar-grown organoids (Figures S10C and S11). Assessing NKX2-1 expression, we found a similarly altered localization in AEC-ON cells grown in 3D under Nikoli c and Jacob Alveolar media as we did in 2D: NKX2-1 expression was cytoplasmic in Nikoli c medium (Figures 6F, asterisk and S10C), whereas NKX2-1 was both nuclear and cytoplasmic in Jacob Alveolar medium (Figures 6F, asterisk, arrow and S10C). Probing for AT2 markers pro-SFTPC and HTII280, we discovered strong induction of HTII280 in a subpopulation of AEC-ON cells comprising organoids grown in Jacob Alveolar medium ( Figure 6F , last panel, arrow). Cells that were positive for HTII280 expressed cytoplasmic NKX2-1, but not all cytoplasmic NKX2-1 expressing cells were positive for HTII280, indicating that these expression changes were independent of each other. Interestingly, neither pro-SFTPC nor mature SFTPC was detected. From these observations, we conclude that under certain growth conditions, it is possible to induce a more AT2-like cell fate in a proportion of AEC-ON cells. Furthermore, the added NOTCH inhibition and thyroid and cytokine signaling activation provided by the 10-reagent Nikoli c medium may counteract the induction of HTII280 expression in AEC-ON organoids. The lung is highly susceptible to environmental damage but is exquisitely engineered to deal with these insults. Upon lung injury, specific cells are mobilized to aid in repair. However, when repair and iScience Article regeneration are deficient, depending on the region injured, a variety of acute and chronic pulmonary diseases arise. Having a full spectrum of cell models available to investigate the complete pathophysiology of these diseases would greatly benefit the field. Here, we established a practical method for immortalizing alveolar epithelial cells from human adult lung tissue by first expanding isolated AT2 cells in ROCK inhibitor medium followed by SV40 LgT lentiviral transduction. We show that the method works robustly, using cells from three different donor lungs. Gene expression analyses of the cell lines show they are transcriptomically distinct from primary alveolar epithelial cells, lung fibroblasts, and LUAD cancer cell lines. Our novel AEC-LgT lines proliferate well in 2D culture and can form lung organoids expressing markers of alveolar epithelial cells in 3D co-culture with fibroblasts. Our original goal was to derive immortalized cell lines from purified human AT2 cells. In the process of accomplishing this, we incidentally found that the cells exhibited gene signatures suggestive of either an ''intermediate'' alveolar epithelial cell state or a distal lung progenitor cell state. In the lung, the alveolar epithelium is maintained by proliferation of AT2 cells and transdifferentiation of a subpopulation of AT2 daughter cells into AT1 cells (Adamson and Bowden, 1974; Barkauskas et al., 2013; Nabhan et al., 2018 (Adams et al., 2020; Strunz et al., 2020) . Our findings suggest that cells comprising the AEC-LgT organoids generally represent an intermediate AEC state, exhibiting AT1-like cell expression patterns (AQP5+/ GPRC5A+; SFTPCÀ/HTII280À) and possessing the AT2-like ability to form structures similar to ''alveolospheres'' recently reported by Katsura et al. (2020) . Distal lung progenitors in the mouse adult lung have been identified as rare subpopulations within the greater ''bulk'' AT2 population and are not all equally fated. AXIN2 + /TM4SF1 + resident AEPs, comprising $20% of bulk AT2 cells, give rise to lineage-labeled AT2 and AT1 cells at sites of lung injury after H1N1 influenza infection (Zacharias et al., 2018) . AT2 ''ancillary'' progenitors express AXIN2 when activated upon lung injury, induced by WNT signaling from surrounding stromal cells (Nabhan et al., 2018) . Although intermediate alveolar cells and alveolar progenitors exhibit different gene expression patterns, the presence of these cell types indicates that the alveolar epithelium has considerable cellular plasticity, which primes the lung to respond to injury expeditiously despite the normally slow turnover of lung cells (Bowden, 1983) . By scRNA-seq, we discovered that AEC-ON organoids contained AXIN2 + /TM4SF1 + cells; however, although AEC-ON organoids were WNT and FGF responsive, reminiscent of AEPs, activation of these pathways alone was not sufficient to induce AT2 cell differentiation or enrich for AT2-like cells. Robust expression of AT2-cell-specific marker HTII280 was induced with Jacob Alveolar medium, which contains not only CHIR99021 and FGF7 but also the glucocorticoid dexamethasone, cAMP, and IBMX (which raises intracellular cAMP and cGMP levels). Interestingly, the Jacob Alveolar medium also resulted in heterogeneous expression of NKX2-1 in the nucleus and cytoplasm. This change in localization may reflect changes in NKX2-1 regulation and interactions with co-factors, which may then affect AEC differentiation state. Yang et al. (2016) found that Sox2-expressing mutant AT1 cells marked by Aqp5 exhibited diffuse Nkx2-1 expression, downregulated AT1 marker expression, and re-entered the cell cycle as marked by Ki67 + proliferation. Although these mutant cells tended to cluster together and morphologically resembled airway cells, the authors concluded that these changes did not indicate a physiologically functional airway cell. Our observations may therefore suggest that activation of WNT, FGF7, and glucocorticoid plus cAMP signaling induces a switch in transcriptional program that initiates a period of cell proliferation before differentiation. Indeed, NKX2-1 has recently been found to regulate AT2 versus AT1 cell fates by epigenetically altering chromatin states (Little et al., 2021) . Although further exploration of growth conditions will be important, our immortalized AEC-derived distal lung cell lines provide an important unmet resource to the research community. Our derivation methodology can be readily applied to lung tissues of diverse racial/ethnic individuals with different genetic and epigenetic landscapes, generating appropriate models for health disparities research. The cells, which proliferate well in 2D, can be subjected to genetic and epigenetic manipulation prior to organoid formation, allowing their use to study differentiation of the distal lung compartment and diseases affecting the distal lung, such as cancer, emphysema, and pulmonary viral infections. We also envision that our 3D iScience Article AEC-LgT cell culture system can be expanded to incorporate additional elements of alveolar physiology, such as the vasculature, or be integrated with current lung-on-a-chip applications (Hassell et al., 2017) . In our characterization of the three AEC-LgT cell lines, we found that although these lines were more similar to each other than to primary human AECs or lung fibroblasts, there were differences among the three lines in 2D growth kinetics and in the frequency and complexity of organoids formed. These differences could arise from many sources, including genetic differences between subjects; epigenetic differences related to numerous factors including age, gender, environmental exposures, manner of death, and/or ventilation time; and technical differences between experiments related to AEC preparation or cellular response to culture conditions. These aspects will be important to study, as additional cell lines are made from a wider range of individuals. Each of the AEC-LgT cell lines we derived will likely have specific applications of interest for further study; however, some limitations must be considered. First, although the reprogramming effect of ROCK inhibitor Y-27632 allowed for expansion of isolated adult AT2 cells as distal progenitor cells, reversion of the transcriptional and epigenetic changes must be further explored in order to fully re-differentiate the cell lines into mature alveolar cells. Recently, Katsumiti et al. (2020) reported the establishment of clonal lines from one human adult lung donor by transduction of hTERT and SV40 LgT. The cell lines expressed low levels of SFTPC at the RNA and protein levels, but the absence of in situ staining showing proper localization of surfactant emphasizes the challenge of maintaining proliferating AT2-like cells in vitro. A second limitation is that clear mRNA expression profiles of AT1 cells are still lacking and this hampers optimal characterization of our cells. AT1 cells are morphologically large and delicate and have been difficult to collect in large numbers, especially for bulk RNA sequencing. Although whole lung scRNA-seq studies have been performed (ie, IPF Cell Atlas, Neumark et al., 2020; Adams et al., 2020; Habermann et al., 2020; Reyfman et al., 2019; Morse et al., 2018) , identified AT1 cells only comprise a small proportion of the total epithelial cell population. As AT1 cells are inherently fragile and the single cell sequencing platforms are sensitive to cell-to-cell noise, the AT1 gene signatures that arise from these analyses may not completely reflect homeostatic AT1 cells. Recent nuclear RNA scRNA-seq experiments have aided in capturing more AT1 cell expression profiles (Koenitzer et al., 2020) and will be important to expand on, while taking into account the possible limitations of examining nuclear RNA, which may be incompletely processed. Lastly, although we were able to induce HTII280 expression in a subset of AEC-ON cells under 3D co-culture conditions, SFTPC expression was still not detected, suggesting the presence of a potentially primed AT2 cell population in need of further external maturation cues, such as those provided by the abutting capillary network from endothelial cells as reported by Reyfman et al. (2019) . Indeed, plans to implant the AEC-LgT cell lines into decellularized mouse lungs, as was done for airway cells (Gilpin et al., 2016) , are in progress to test whether physiological cues can further induce alveolar epithelial cell differentiation and maturation. Detailed methods are provided in the online version of this paper and include the following: This work was supported in part by the Norris Comprehensive Cancer Center core grant, award number P30CA014089 from the National Cancer Institute, and utilized the Norris Translational Pathology and Flow Cytometry Core Facilities. The content is solely the responsibility of the authors and does not necessarily represent the official views of the National Cancer Institute or the National Institutes of Health or any of the funders. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript. ET primarily designed and performed the experiments. TS and XL assisted in preparing 3D organotypic cultures and immunostainings. YL and HW provided staining support. CY assisted with in vivo subcutaneous injection. IAO supervised the entire study. ET and IAO wrote the paper. AYC assisted with sample preparation for scRNA-seq. DJ performed scRNA-seq data processing and quality control. RL provided access to 103 Genomics Chromium device for scRNA-seq and consultation on data analysis approaches. WDW evaluated tissue H&E slides. ALR, CNM, BZ, and ZB provided resources including primary AEC. ET, BZ, ZB, and IAO interpreted results. All authors edited and approved the paper. Correspondence should be addressed to IAO. The authors declare no competing interests. We worked to ensure sex balance in the selection of non-human subjects. One or more of the authors of this paper received support from a program designed to increase minority representation in science. Butler, A., Hoffman, P., Smibert, P., Papalexi, E., and Satija, R. iScience Article Liebler, J.M., Marconett, C.N., Juul, N., Wang, H., Liu, Y., Flodby, P., Laird-Offringa, I.A., Minoo, P., and Zhou, B. (2016) (Table 1) . Human AT2 cells were isolated and purified as previously described Marconett et al., 2013) , modified by using anti-EpCAM beads and purity was assessed by staining of cytospins (Table 1) . AT2 cells were resuspended in 50:50 growth medium [50% DMEM-F12 (Sigma-Aldrich D64421), 50% DMEM High glucose (Gibco 21063) supplemented with 10% FBS (Omega Scientific FB-11), Pen/Strep, Gentamycin, and Amphotericin B]. The ability to differentiate into AT1-like cells was assessed by SFTPC and AQP5 expression by qPCR and Western blot analyses as described by Marconett et al. (2013) . Remaining purified AT2 cells were tested for mycoplasma then resuspended in 90% growth medium-10% DMSO, frozen in cryovials at 1-2x10 6 cells/ml, and stored in liquid nitrogen. Cells used in the study were negative for mycoplasma and rodent pathogens. Cells were routinely tested using an in-house qPCR-based method adapted from Ishikawa et al. (2006) . Briefly, cells to be tested were passaged two times in antibiotic-and antimycotic-free media, then collected for genomic DNA (gDNA) extraction using Qiagen DNeasy Blood and Tissue kit (Qiagen 69504) following the manufacturer's instructions with the exception of the last step in which gDNA was eluted in DNase-RNase-free water. Genomic DNA was diluted to a concentration of 10 ng/mL in water, then 50 ng gDNA was used per qPCR reaction using iQ SYBR Green Supermix (Bio-Rad 1708880). Mycoplasma-specific primer sequences used: forward primer for Acholeplasma laidlawii species, 5'-GGAATCCCGTTTGAAGATAGGA, for Mycoplasma pirum species, 5 0 -GGAAAATGTTATTTTGACGGAACCT, for six other Mycoplasma species, 5 0 -TCTGAAT(C/T) TGCCGGGACCACC; reverse primer for all 8 species of Mycoplasma listed above, 5 0 -CTTTCC(A/C) TCAC(G/T)GTACT(A/G)GTTCACT. Each assayed primer set was tested in technical triplicates. Per 50 ng gDNA (5 mL), 0.375 mL 3 mM forward primer, 0.375 mL 3 mM reverse primer, and 6.25 mL SYBR Supermix was combined, mixed gently, then run on an MJ DNA Engine Opticon 2 Research thermocycler. Cycling conditions: Initial 94 C, 3 min, followed by 40 cycles of: (i) 94 C for 15 s; (ii) 65 C for 30 s, (iii) 72 C for 30 s, followed by final extension at 72 C for 10 min. A melting curve (55 C-95 C) was performed at the end of the PCR to confirm the identity of each product and verify controls. Previously frozen isolated AT2 cells were quick-thawed in a 37 C water bath, spun down to remove freezing medium, and resuspended in Fmed + ROCKinh medium, modified from Liu et al. (2012) [3:1 (v/v) ll OPEN ACCESS One thousand cells were plated on 24-well culture plates in quadruplicate in Fmed + ROCKinh medium and monitored for seven days. Twenty-four hours post seeding (day 1), cells were detached with Trypsin-EDTA (0.05% Trypsin, 0.02% EDTA) and resuspended in Fmed + ROCKinh medium. Cells were counted manually using a hemocytometer. Cell counts were reported as mean total cell number GSD from at least three biological replicates. Population doubling time (PDT) was calculated based on the linear part of the growth curve using the equation [(t 2 -t 1 )/3.32] X (log n 2 -log n 1 ), where n 2 was the number of cells on day 6 and n 1 was the number of cells on day 4. High density proliferation assays were performed as described above with an initial cell seed count of 5,000 cells per well. Data are available through the NCBI Gene Expression Omnibus (GEO) repository under the SuperSeries GSE164515 which contains scRNA-seq (2 samples, SubSeries GSE164514). AEC-ON cells (passage 9) grown in 2D and as organoids in 3D co-culture were harvested in parallel by sequential Dispase protease treatment (StemCell Technologies 07923) and gentle centrifugation. Dissociation of organoids into a singlecell suspension was assessed by brightfield microscopy using a hemocytometer. Surrounding single cells in the 3D culture that did not form organoids were excluded from collection by first incubating samples with Dispase briefly for $15 min in a 37 C water bath, followed by gentle centrifugation. The subsequent iterations of Dispase treatment were for 30 min in a 37 C water bath, followed by centrifugation. Cells were immediately FACS sorted for GFP + epithelial cells using MLg fibroblasts as a negative control for GFP fluorescence gating. Retrieved cells for each sample were then washed in 0.04% BSA-PBS solution. Barcoding and library preparation for scRNA-seq (n = 1) was performed following the manufacturer's protocol for the 10x Genomics Chromium Single Cell 3' GEM, Library & Gel Bead Kit v3 (PN-1000092). cDNA libraries were assessed for quality and quantification according to the Chromium Single Cell 3' Reagent kit v3 user guide using the High Sensitivity D5000 ScreenTape (Agilent 5067-5592) and 2200 TapeStation Controller software (Agilent, Santa Clara, CA). Sequencing was performed using Illumina HiSeq 3000/4000 kit at a coverage of 50,000 raw reads per cell (Paired-end; Read 1: 28 cycles, i7 Index: 8 cycles, i5 Index: 0 cycles, Read 2: 91 cycles). Raw data were processed using the CellRanger function cellranger count (10x Genomics, v3.1.0, default settings) to align to the human reference genome (hg19, 10x Genomics, v1.2.0) and identify 4320 2D cells and 7144 3D cells (11,464 total cells), which were then aggregated using the CellRanger pipeline (10x Genomics, v3.1.0, cellranger aggr function on default settings). Pre-processed outputs were then analyzed in R using the Seurat package for additional quality control assessment and downstream analyses (Butler et al., 2018; Stuart et al., 2019) . Cells with less than 500 transcripts profiled and more than 18% of their transcriptome of mitochondrial origin were removed, leaving a total of 10,965 cells (4082 2D and 6883 3D cells) used for clustering and visualization. Read counts were normalized using the SCTransform method . Dimensionality reduction and clustering analyses were performed as outlined in the Seurat vignette (https://satijalab.org/seurat/v3.2/pbmc3k_tutorial.html) with modifications: a Shared Nearest Neighbor (SNN) graph was constructed using the FindNeighbors() function on 20 dimensions of reduction and clusters were determined using the FindClusters() function with a reduction of 0.3. For cell proliferation assays, cell counts were reported as the mean total cell number GSD from at least three independent biological replicates each with technical triplicates. A test for normal distribution using the Shapiro-Wilk's test was first performed in R (v3.6.0, ''Planting of a Tree'') using the function shapiro.test() and then the student's t-test was performed using the function t.test(). Statistical details can be found in Figure 1D figure legend. For anchorage-independent growth assays, colony counts were reported as the mean G standard deviation of at least three independent biological replicates each with six technical replicates. Since values were not normally distributed as evaluated by the Shapiro-Wilk's test, statistical significance was determined by the Wilcoxon nonparametric rank sum test in R using the function wilcox.test(). Statistical details can be found in Figure 1G figure legend. For bulk RNA-seq differential gene expression analyses, the DESeq2 package (Bioconductor release version 3.14) in R was used and the most statistically significant differentially expressed genes were identified as those having log2 fold change > |2| and BHadjusted p-value < 0.05 (see additional details in method details section). For 3D organoid size and percent organoid formation efficiency experiments, values were reported as the mean size and mean percent G respectively, from three biological replicates (different cell passage numbers) each with at least six technical replicates (number of inserts). 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Proc Natl Acad Sci RRID:Addgene_12251 Plasmid: pRSV-Rev Dull et al 5% FBS, 0.4 mg/mL hydrocortisone (Sigma-Aldrich H0888), 5 mg/mL insulin (Sigma-Aldrich I0516), 8.4 ng/mL cholera toxin ng/mL human recombinant EGF (ThermoFisher PHG0311) On the second day, Fmed + ROCKinh medium was completely replaced with fresh medium. Wells were monitored every day for surviving cells and proliferation. Media were changed every 2-3 days. Once cells reached 90-100% confluence, cells were detached with Accutase (Innovative Cell Technologies AT-104) and re-plated onto 48-well culture plates Addgene 11254) by PCR amplification into LeGO iG vector between BamHI and SbfI sites, upstream of enhanced green fluorescent protein (eGFP). hTERT CDS was subcloned from pBABE-puro-hTERT plasmid Addgene 12253), and 2 mg lentiviral plasmid carrying transgene (LeGO iG-CDK4 R24C , LeGO iT-hTERT, LeGO iG-SV40 LgT). Viral supernatant was collected at 48-and 72-h post-transfection, pooled, spun down at 300 g to remove cell debris, filtered through 0.45 mm PES filters, and concentrated using Lenti-X Concentrator (Takara Bio 631231) Of 300 mL resuspended viral supernatant, 1, 2, and 3 mL of LeGO iG-CDK4 R24C , LeGO iT-hTERT, and LeGO iG-SV40 LgT viruses were used to transduce cells in a total media volume of 50 mL. The following day, 100 mL of Fmed + ROCKinh media were added to each well to dilute out the viral supernatant. Two days post-transduction when cells were 90-100% confluent, cells were detached using Accutase and re-plated onto 48-well culture plates. At four days post-transduction, expression of CDK4 R24C , hTERT, and SV40 LgT was checked by fluorescence microscopy (Nikon Eclipse Ti-U inverted fluorescence microscope). Cells transduced with LeGO iT-hTERT only, LeGO iT-hTERT + LeGO iG-CDK4 R24C , or LeGO iT-hTERT + LeGO iG-SV40 LgT were sorted by fluorescence-activated cell sorting (FACS) on eGFP, tdTomato, or dual fluorescence at the USC Flow Cytometry Core Facility (FACS Aria II For the top layer, in 1.5 mL, 5,000 cells were mixed with 0.3% final concentration Noble Agar in Fmed + ROCKinh medium. The top layer was allowed to solidify at room temperature (RT) before 1 mL Fmed + ROCKinh medium was carefully added. For A549 positive control cells (ATCC CCL-185), RPMI 1640 medium with 10% FBS was used to set up soft agar layers. Media for all cell lines were changed every 3 days. Colony growth was monitored for 1 month. Colonies were visualized by staining soft agar samples with crystal violet solution (crystal violet dissolved in 10% ethanol) according to Borowicz et al. (2014) and counted using ImageJ software Three-dimensional (3D) co-culture 1X ITS (Gibco 41400-045), 10% FBS, 1X Antibiotic-Antimycotic] with 50% Growth Factor Reduced Matrigel (Corning 354230) and plated on Clear Transwell inserts (Corning 3470), 100 mL per insert. Basic medium supplemented with 10 mM SB-431542 (BioVision 1674), a transforming growth factor beta (TGFb) inhibitor, was added to the outer chamber and replaced every 2 days. Organoid formation was monitored under brightfield microscopy for 1-2 months. Whole-well images were captured using a Leica MZ16 F fluorescence stereomicroscope and Spot Advanced software (v4.5.8) through the USC Hastings Center for Pulmonary Research Core. Brightfield and fluorescence images at 4X magnification were captured using ECHO Revolve R4 fluorescence microscope Three-dimensional co-cultures were set up as described above. Treatment with 1 mM WNT agonist CHIR99021 (Sigma-Aldrich SML1046) dissolved in DMSO or 10 ng/mL FGF7 Media were changed every two days. Cultures were maintained for two months before sphere size and number were assessed. Treatment of 3D cultures with increasing concentrations of CHIR (1, 3, 5 mM) were performed as detailed above; spheres were assessed after five weeks ThermoFisher 35050061), 3 mM CHIR99021, 100 ng/mL FGF7, 100 ng/mL FGF10, 50 nM Dexamethasone (Sigma-Aldrich D4902), 0.1 mM 8-bromo-cyclic-AMP (Cayman Chemical 14431), 0.1 mM 3-isobutyl-1-methylxanthine (IBMX) (Enzo Life Sciences BML-PD140) Jacob ''progenitor specification'' medium [Advanced DMEM/F12, 1X Glutamax, 3 mM CHIR99021, 10 ng/mL human BMP4 (ThermoFisher PHC9534), 100 nM all-trans retinoic acid (Sigma-Aldrich R2625)], or Jacob ''alveolar differentiation'' medium PFA solution was removed by inverting inserts. Inserts were then submerged in 1X PBS for 15 min with two changes and dehydrated in 70% ethanol for 30 min with three changes. Matrigel samples were removed from insert housing by cutting the filter out from the bottom face with a feather razor Paraffin blocks were sliced to 5 mm sections in-house using Microm HM 314 microtome through the USC Hastings Center for Pulmonary Research Core. Immunofluorescence staining For 2D cultures. Cells were plated on a standard multiwell culture plate to reach confluence the following day. Cells were rinsed with filtered 1X PBS, fixed with ice-cold methanol for 10 min, washed three times with PBS, blocked with 5% filtered bovine serum albumin (BSA) in PBS, then probed overnight at 4 C with respective primary antibodies in 5% BSA-PBS solution. Horse serum (RMBIO DES-BBT) diluted to 30% in PBS was used as blocking solution for pro-SFTPC antibody. The following day, cells were washed with 1X TBST (20 mM Tris, 150 mM NaCl, 0.01% Tween 20, pH 7.5), probed in PBS with biotinylated secondary antibodies for 1 h, washed, then probed with Streptavidin-Alexa Fluor 647 conjugate (ThermoFisher S21374). For double staining Mounting solution with 4 0 ,6-diamidino-2-phenylindole (DAPI) was used as nuclear counterstain (Vector Laboratories H-1200) Slides were then submerged in xylene, two changes, 5 min each, rehydrated through a series of ethanol baths, each with two changes (100% ethanol, 95%, 85%, 75%, 50%), and rinsed with distilled water. Samples were boiled for 6 min on high power, then for 5 min at 10% power in Tris-based antigen unmasking solution (Vector Laboratories H-3301) in a standard microwave oven, cooled to RT, then permeabilized with 2% Triton X-100 in PBS for 15 min, washed with PBS, then blocked with 5% BSA-PBS or 30% horse serum in PBS (for pro-SFTPC antibody) for 1 h RT. Citrate-based unmasking solution was used for pro-SFTPC probed samples (Vector Laboratories H-3300). Primary antibodies were diluted in 5% BSA-PBS or 30% horse serum (pro-SFTPC antibody) and probed overnight at 4 C. Subsequently, all washes were with 1X TBST. For single and double stainings, biotinylated secondary antibodies, fluorochrome-conjugated secondaries Primary antibodies were: HOPX (SCBT sc-30216) SOX2 (SCBT sc-365823), SOX9 (SCBT sc-20095), GPRC5A (Abbexa abx005719), HTII280 (Terrace Biotech TB-27AHT2-280), mouse control IgG (Vector Laboratories I-2000), rabbit control IgG (Vector Laboratories I-1000), mouse control IgM (Sigma-Aldrich M5909) Immortalized alveolar epithelial cell lines generated in this study are available upon request with the submission of the signed material transfer agreement supplied by USC.Data and code availability d Bulk RNA-seq and single-cell RNA seq data have been deposited at GEO and are publicly available as of the date of publication. Accession numbers are listed in the key resources table.d This paper also analyzes existing, publicly available data. These accession numbers for the datasets are listed in the key resources table.d Microscopy data reported in this paper will be shared by the lead contact upon request.d This paper does not report original code.d Any additional information required to reanalyze the data reported in this paper is available from the lead contact upon request. Mouse experiments were performed under the guidance of the University of Southern California Institutional Animal Care and Use Committee (IACUC protocol ID 21116). Tumorigenicity of the three AEC-LgT cell lines was assessed by subcutaneous injection of 1 3 10 6 cells into each flank of 6-week-old male and female homozygous Foxn1 nu NU/J mice (Jackson Laboratories, strain 002019). NU/J mice were kept in sterile housing and given irradiated rodent feed ad libitum. Ten male and ten female NU/J mice were used in the study. Equal numbers of male and female mice were included in experimental and control groups. On the day of injection, cells expanded on standard tissue culture dishes were detached with Accutase, collected in Fmed + ROCKinh growth medium, then centrifuged. Supernatant was removed and then cells were resuspended in 1 mL growth medium and manually counted using a hemocytometer. For each flank, a master mix of cells resuspended in sterile phosphate-buffered saline (PBS) and 50% final concentration of Matrigel Membrane Matrix solution (Corning 354234) was prepared such that 1 3 10 6 cells were delivered in 150 mL of solution. Mixes were kept on ice as injections were performed to prevent premature solidification. Cell mixtures were injected using a tuberculin syringe with attached 27G needle (BD 305620). Mice were anesthetized by inhaled isoflurane according to IACUC-approved procedures. AEC-hTERT cells were used as negative controls as they were moderately proliferative out of the four slowgrowing cell lines but did not form colonies in soft agar (see Figure 1D ). A549 cells (RRID:CVCL_0023) were used as positive controls (Jiang et al., 2001; Kang et al., 2006) . Four mice (8 flanks (Table S3 ). For the AEC lines (AEC-FT-ROCKinh, AEC-CDK4 R24C , AEC-hTERT, AEC-CDK4 R24C +hTERT, and AEC-FT) and the adult human lung fibroblast cell line, HLF-133, total RNA was isolated from subconfluent, exponentially dividing cells using Illustra TriplePrep kit (GE Healthcare 28-9425-44) following manufacturer's instructions. For the primary AECs, purified alveolar epithelial cells from three de-identified human donor lungs were used. Cells from each lung were distinguished from each other by the sample name extension ''-m,'' ''-f,'' or ''-a.'' From each lung, purified primary AT2 cells and AT2 cells transdifferentiated on filters for 6 days into AT1-like cells (Danto et al., 1995) were isolated and total RNA extracted. Total RNA from purified AT2 cells and AT1-like cells from one of the donor lungs (labeled ''AEC-m'' in Table S3 ) had been previously characterized GEO record GSE84273) . Total RNA from the remaining two donor lungs (''AEC-f'' and ''AEC-a'' in Table S3 ) was also previously isolated in our laboratory and sequenced, however without subsequent publication. For the AEC lines, HLF-133 cell line, and primary AECs, 2 mg of RNA were submitted to the USC Molecular Genomics Core facility for sequencing. RNA quality was assessed on the Bioanalyzer (Agilent) then rRNA-depleted using Ribo-Zero rRNA Removal kit for human samples (Illumina MRZH11124) before proceeding with library preparation (TruSeq mRNA Stranded Library preparation kit, Illumina, 20020594). These samples were sequenced paired-end 75 bp (PE75) at a depth of $20-30 million reads per sample, on HiSeq2000/2500 (Illumina). For AEC-ON and AEC-TN cell lines, total RNA was isolated using the Illustra TriplePrep kit as detailed above and 1 mg of RNA was submitted to the UCLA Technology Center for Genomics and Bioinformatics for sequencing. Samples were rRNA depleted and libraries were prepared at the UCLA facility, PE75, sequenced at a depth of $30 million reads per sample on NextSeq500 Mid Output (Illumina). Raw fastq files were retrieved and processed as follows:Raw fastq files generated from our samples and taken from ENCODE and DBTSS databases were uploaded to Partek Flow through the USC Norris Medical Library Bioinformatics Core and the USC High-Performance Computing nodes. Files were quality controlled using Partek's QC tool and trimmed at both ends using Partek default parameters, then aligned using STAR RNA-sequence aligner (v 2.6.1d) (Dobin et al., 2013) to the human genome assembly, hg38 GENCODE Genes, release 29. Raw read counts were generated by quantification to the transcriptome using Partek E/M algorithm under default parameters, using hg38 GENCODE, release 29. Raw counts were rounded to the nearest integer then analyzed and processed in R (v3.6.0) using the DESeq2 package (Love et al., 2014) . Genes with zero reads across samples were first filtered out, then counts were transformed using the regularized log (rlog) transformation method. Transformed counts were used to generate a sample-sample (Euclidean) distance matrix and PCA plot and to perform unsupervised hierarchical clustering. Differential gene expression analysis was performed under default DESeq2 parameters using the results() function and setting the appropriate pairwise comparison contrast parameter; the reference group comprised all established AEC lines (8 samples). Log 2 fold change shrinkage lfcShrink() was performed using the ''normal'' shrinkage estimator for visualization and ranking of genes. The most statistically significant differentially expressed genes were identified as those having log2 fold change > |2| and BH-adjusted p-value < 0.05.Due to data acquisition and availability constraints, batch effect was accounted for in the DESeq2 design formula since the LUAD data used in this study were downloaded entirely from DBTSS. In lieu of performing standard batch removal (ie, removeBatchEffect() from the limma package), clustering was performed on the original study dataset plus additional LUAD RNA-seq data available from ENCODE to ensure RNAsequencing data sources were not strongly driving sample segregation (see Figures S2A-S2D ).Gene clusters from unsupervised clustering. GO terms were analyzed using PANTHER14.1 (2018_04 release) PANTHER Overrepresentation Test (Released 20200728) with the default reference gene list of all Homo sapiens genes in the GO Ontology database (released 2019-07-03) (www.geneontology.org) (Mi et al., 2021) . Statistically significant GO terms were calculated using Fisher's Exact Test with FDR corrected p-value cutoff of < 0.05.GO terms of differentially expressed genes. Associated GO terms for each gene were taken from Ensembl gene database of annotated genes (release 98, Human genome assembly GRCh38.p13, www. ensembl.org) (Howe et al., 2021) .