The key role of extracellular matrices in alveolar epithelial cell (AEC) biology is highlighted by the phenotypes of primary AECs cultured on a soft laminin gel contrasted with that on a stiff, fibronectin matrix. On laminin, AECs maintain an epithelial phenotype, and progenitor cells within this population proliferate. In contrast, on fibronectin, AECs rapidly lose surfactant expression and spread extensively, changes that depend on activation of latent TGF-β1 by engagement of fibronectin-binding integrins. The progenitor subpopulation responding to TGF-β1 undergoes epithelial mesenchymal transition (EMT). Although it remains uncertain to what degree EMT contributes directly to collagen 1 production, signaling pathways critical to EMT are important for repair and fibrosis, implying that EMT is part of the general program of lung repair. EMT reprogramming requires not only Smad signaling but also pY654-β-catenin. Generation of pY654-β-catenin requires assembly of complexes of the integrin α3β1, E-cadherin, and TGF-β1 receptors, and such assembly is a function of cell-cell and cell-matrix contacts. Sequestration of α3β1 or E-cadherin in such contacts prevents complex assembly, TGF-β1 induced pY654-β-catenin generation and EMT. Disruption of these contacts is a signal for the cells to initiate repair. Critical remaining questions center around better definition of direct versus indirect effects of EMT on collagen deposition and the nature of AEC progenitors differentiating during fibrogenesis. Elucidation of specific inhibitors of EMT should further test the question of whether the process is important to fibrosis in vivo and a viable therapeutic target.