Adult pulmonary mesenchymal stromal progenitor/stem cells (MSCs) maintain structural and functional integrity of the lung. MSCs contribute to lung tissue repair/regeneration by functioning as niche cells which provide permissive or restrictive cues for the proliferation and differentiation of epithelial stem/progenitor cells. Environmental stressors and/or aging may result in MSC dysfunction, contributing to the development of respiratory diseases such as pulmonary fibrosis. In this article, we summarize the current knowledge on the origin, function, and potential mechanisms of action of adult lung MSCs. We highlight the potential diagnostic value and therapeutic role of MSCs in lung diseases and discuss future directions in the study of lung MSCs, including engineering MSC-populated functional lung tissues for transplantation and regenerative medicine.