Alveolar type 2 (AT2) and club cells are part of the stem cell niche of the lung and their differentiation is required for pulmonary homeostasis and tissue regeneration. A disturbed crosstalk between fibroblasts and epithelial cells contributes to the loss of lung structure in chronic lung diseases. Therefore, it is important to understand how fibroblasts and lung epithelial cells interact during regeneration. Here we analyzed the interaction of fibroblasts and the alveolar epithelium modelled in air-liquid interface cultures. Single-cell transcriptomics showed that co-cultivation with fibroblasts leads to increased expression of type 2 markers in pneumocytes, activation of regulons associated with maintenance of alveolar type 2 cells (e.g. Etv5), and trans-differentiation of club cells towards pneumocytes. This was accompanied by an intensified transepithelial barrier. Vice versa, activation of NFκB pathways and the CEBPB regulon as well as the expression of IL-6 and other differentiation factors (e.g. FGFs) were increased in fibroblasts co-cultured with epithelial cells. Recombinant IL-6 enhanced epithelial barrier formation. Therefore, in our co-culture model, regulatory loops were identified by which lung epithelial cells mediate regeneration and differentiation of the alveolar epithelium in a cooperative manner with the mesenchymal compartment. Keywords: alveolar regeneration,; differentiation; fibroblasts; pneumocytes; single-cell.