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The understanding of bone marrow stem cell plasticity and contribution of bone marrow stem cells to pathophysiology is evolving with the advent of innovative technologies. Recent data has led to new mechanistic insights in the field of mesenchymal stem cell (MSC) research, and an increased appreciation for the plasticity of the hematopoietic stem cell (HSC). In this review, we discuss current research examining the origin of pulmonary cell types from endogenous lung stem and progenitor cells as well as bone marrow-derived stem cells (MSCs and HSCs) and their contributions to lung homeostasis and pathology. We specifically highlight recent findings from our laboratory that demonstrate an HSC origin for pulmonary fibroblasts based on transplantation of a clonal population of cells derived from a single HSC. These findings demonstrate the importance of developing an understanding of the sources of effector cells in disease state. Finally, a perspective is given on the potential clinical implications of these studies and others addressing stem cell contributions to lung tissue homeostasis and pathology.