BackgroundRegeneration of healthy lung tissue in patients with end-stage respiratory disease would cure disease. Therefore, a detailed understanding of lung development is needed. The most important epithelial stem-cell population in developing lungs is found in distal branching tips, and these Sox9+ lung epithelial stem cells (LESCs) generate all epithelial lineages. Our objective was to develop a self-renewing, genetically modifiable epithelial in-vitro culture system from human embryonic LESCs. MethodsHuman embryonic LESCs were characterised using genome-wide transcriptional analysis (RNA-seq, Illumina, San Diego, CA, USA) and immunohistochemistry at 5–20 weeks postconception. LESCs were microdissected, and self-renewing expansion in three-dimensional (3D) organoid culture was established empirically. We assessed similarity between cultured and fresh LESCs via RNA-seq and immunohistochemistry. Organoids were differentiated in vitro, or in vivo by xenotransplantation into bleomycin-injured mouse lungs or kidney capsule. SOX9 was deleted with CRISPR–Cas9. FindingsRNA-seq of LESCs identified broad-scale transcriptional differences between mouse and human embryonic lung stem cells. Human LESCs were successfully expanded for more than 10 months as karyotypically stable 3D organoids using a combination of seven signalling molecules. The LESC stem-cell markers, transcriptome, and organoid morphology were maintained throughout the culture period. Bronchiolar and alveolar differentiation was achieved in vitro and in vivo. Moreover, xenotransplantation of organoids into bleomycin-injured adult mouse lungs was extremely efficient. Knocking out SOX9 led to a loss-of-self-renewing phenotype. InterpretationOur novel genetically modifiable human embryonic lung culture system enables for the first time, to our knowledge, the in-vitro study of human lung development and disease. We anticipate that this system will transform lung regenerative medicine by guiding development of improved protocols for induced pluripotent stem-cell differentiation and adult stem-cell manipulation in vivo, benefiting patients with end-stage respiratory disease. Furthermore, our lung injury–xenotransplantation protocol provides the first method for efficient future cell therapy. FundingWellcome Trust (PhD programme for clinicians), Medical Research Council, Addenbrooke's Charitable Trust.