Pompe disease is an autosomal recessive glycogen storage disease caused by mutations in the gene that encodes acid alpha-glucosidase (GAA)-an enzyme responsible for hydrolyzing lysosomal glycogen. GAA deficiency results in systemic lysosomal glycogen accumulation and cellular disruption. Glycogen accumulation in skeletal muscles, motor neurons, and airway smooth muscle cells is known to contribute to respiratory insufficiency in Pompe disease. However, the impact of GAA deficiency on the distal alveolar type 1 and type 2 cells (AT1 and AT2) has not been evaluated. AT1 cells rely on lysosomes for cellular homeostasis so that they can maintain a thin barrier for gas exchange, whereas AT2 cells depend on lysosome-like structures (lamellar bodies) for surfactant production. Using a mouse model of Pompe disease, the Gaa-/- mouse, we investigated the consequences of GAA deficiency on AT1 and AT2 cells using histology, pulmonary function and mechanics, and transcriptional analysis. Histological analysis revealed increased accumulation of lysosomal-associated membrane protein 1 (LAMP1) in the Gaa-/- mice lungs. Furthermore, ultrastructural examination showed extensive intracytoplasmic vacuoles enlargement and lamellar body engorgement. Respiratory dysfunction was confirmed using whole body plethysmography and forced oscillometry. Finally, transcriptomic analysis demonstrated dysregulation of surfactant proteins in AT2 cells, specifically reduced levels of surfactant protein D in the Gaa-/- mice. We conclude that GAA enzyme deficiency leads to glycogen accumulation in the distal airway cells that disrupts surfactant homeostasis and contributes to respiratory impairments in Pompe disease.NEW & NOTEWORTHY This research highlights the impact of Pompe disease on distal airway cells. Prior to this work, respiratory insufficiency in Pompe disease was classically attributed to pathology in respiratory muscles and motor neurons. Using the Pompe mouse model, we note significant pathology in alveolar type 1 and 2 cells with reductions in surfactant protein D and disrupted surfactant homeostasis. These novel findings highlight the potential contributions of alveolar pathology to respiratory insufficiency in Pompe disease.