BRE-eGFP expression, in agreement with earlier reports describing the temporal expression pattern of some BMP pathway components during late lung development [65] , peaks around birth and returns to very low levels upon completion of lung development. Remarkably, severe depletion of Clara cells in the adult lung by naphthalene treatment, leads to re-expression of the eGFP reporter around NEBs and terminal bronchioles, areas known to harbour airway progenitor cells. Likewise, injury of the alveolar epithelium in the adult lung by bleomycin treatment, leads to re-expression of eGFP initially in SpC pos cuboidal epithelial cells, which we postulated to be alveolar epithelial progenitors and subsequently in squamous T1a low cells which we postulated to be derived from the former population and on the way to differentiate to Type-I pneumonocytes. Our findings are compatible with the notion that during the late stages of lung development the role of canonical BMP signalling pathway is to maintain the undifferentiated state of the airway and alveolar epithelial progenitors preventing premature exhaustion of their pools and securing the continuous supply of the differentiated epithelial cells that are required for a fully developed lung. The reactivation of the BMP responsive reporter in adult animals undergoing repair of severe epithelial injury, where the same requirements regarding proper management of the undifferentiated epithelial progenitor pools apply, is also compatible with this conjecture. An analogous function has been previously proposed for BMP signaling regarding the maintenance of the undifferentiated state of pluripotent mouse embryonic stem (ES) cells [66, 67] and the maintenance of the undifferentiated, multipotent state of distal lung progenitor cells [45, 68] .