The role of bone marrow stem cells in tissue regeneration including lungs is well established [36, 37, 38, 39] . However, the precise identity of specific subpopulation of BMCs that has tissue regeneration capacity is not known. As reported for human progenitor epithelial cells, porcine Oct4 + Ccsp + colony cells were detected in the plastic-adherent fraction surrounded by mesenchymal cells [40] . Therefore, it is likely that the progenitor epithelial cells were derived from mesenchymal precursors. Previously, bone marrow and even cord blood MSC were shown to have epithelial differentiation potential. Cord blood MSC when cultured in vitro expressed lung-specific markers such as Ccsp, SPC, and CFTR [41] . Intravenous administration of cord blood-MSC into NOD-SCID mice resulted in a low level of airway engraftment of the cord blood-MSC that expressed cytokeratin and CFTR. Similarly, bone marrow MSC differentiated to type I and II pneumocytes in vitro and following intravenous or intratracheal administration, engrafted in recipient lung paren-chyma as type I and II pneumocytes [3, 42] . These observations suggest that bone marrow MSC could serve as precursors of differentiated epithelial cells. Moreover, in this study we observed that progenitor epithelial cells when cultured in 50% MSC-CM were able to differentiate into type I and II pneumocytes further providing evidence that mesenchymal stroma is important for the pluripotency of epithelial colony cells. Future work will be directed to identify the molecular signals provided by the mesenchymal precursors that regulate the differentiation potential of epithelial progenitor cells.