Alveologenesis is a developmental step involving the expansion of the lung surface area which is essential for gas exchange. The gas exchange process is mediated by alveolar type I (AT1) cells, which are known to be differentiated from alveolar type II (AT2) or bipotent cells. Due to the difficulty of isolating and culturing primary AT1 cells, the mechanism underlying their differentiation is not completely understood. We performed single-cell RNA sequencing (scRNA-seq) of fibroblast-dependent alveolar organoids (FD-AOs), including human induced pluripotent stem cell (hiPSC)-derived epithelial cells and fetal lung fibroblasts, and identified hiPSC-derived AT1 (iAT1) cells. A comparison of the FD-AOs and fibroblast-free alveolar organoids showed that iAT1 cells were mainly present in the FD-AOs. Importantly, the transcriptomes of iAT1 cells were remarkably similar to those of primary AT1 cells. Additionally, XAV-939, a tankyrase inhibitor, increased iAT1 cells in passaged FD-AOs, suggesting that these cells were differentiated from hiPSC-derived AT2 (iAT2) cells through the inhibition of canonical Wnt signaling. Consequently, our scRNA-seq data allowed us to define iAT1 cells and identify FD-AOs as a useful model for investigating the mechanism underlying human AT1 cell differentiation from AT2 cells in vitro. Keywords: Wnt signaling pathway; alveolar epithelial cells; lung; pluripotent stem cells; single-cell analysis.