Individual alveolar epithelial cells (AECs) collaboratively form a tight barrier between atmosphere and fluid-filled tissue to enable normal gas exchange. The tight junctions of AECs provide intercellular sealing and are integral to the maintenance of the AEC barrier integrity. Disruption and failure of reconstitution of AEC barrier result in catastrophic consequences, leading to alveolar flooding and subsequent devastating fibrotic scarring. Recent evidences reveal that many of the fibrotic lung diseases involve AECs both as a frequent target of injury and as a driver of ongoing pathological processes. Aberrantly activated AECs express most of the growth factors and chemokines responsible for the proliferation, migration, and activation of fibroblasts. Current evidences suggest that AECs may acquire overdrive activation in the initial step of fibrosis by several mechanisms, including abnormal recapitulation of the developmental pathway, defects of the molecules essential for epithelial integrity, and acceleration of aging-related properties. Among these initial triggering events, epithelial Pten, a multiple phosphatase that negatively regulates the PI3K/Akt pathway and is crucial for lung development, is essential for the prevention of alveolar flooding and lung fibrosis through the regulation of AEC barrier integrity after injury. Reestablishment of AEC barrier integrity also involves the deployment of specialized stem/progenitor cells.