Idiopathic Pulmonary Fibrosis (IPF) is a devastating form of respiratory disease with a life expectancy of 3–4 years. Inflammation, epithelial injury and myofibroblast proliferation have been implicated in disease initiation and, recently, epithelial-fibroblastic crosstalk has been identified as a central driver. However, the ability to interrogate this crosstalk is limited due to the absence of in vitro models that mimic physiological conditions. To investigate IPF dysregulated cross-talk, primary normal human bronchial epithelial (NHBE) cells and primary normal human lung fibroblasts (NHLF) or diseased human lung fibroblasts (DHLF) from IPF patients, were co-cultured in direct contact at the air–liquid interface (ALI). Intercellular crosstalk was assessed by comparing cellular phenotypes of co-cultures to respective monocultures, through optical, biomolecular and electrical methods. A co-culture-dependent decrease in epithelium thickness, basal cell mRNA (P63, KRT5) and an increase in transepithelial electrical resistance (TEER) was observed. This effect was significantly enhanced in DHLF co-cultures and lead to the induction of epithelial to mesenchymal transition (EMT) and increased mRNA expression of TGFβ-2, ZO-1 and DN12. When stimulated with exogenous TGFβ, NHBE and NHLF monocultures showed a significant upregulation of EMT (COL1A1, FN1, VIM, ASMA) and senescence (P21) markers, respectively. In contrast, direct NHLF/NHBE co-culture indicated a protective role of epithelial-fibroblastic cross-talk against TGFβ-induced EMT, fibroblast-to-myofibroblast transition (FMT) and inflammatory cytokine release (IL-6, IL-8, IL-13, IL-1β, TNF-α). DHLF co-cultures showed no significant phenotypic transition upon stimulation, likely due to the constitutively high expression of TGFβ isoforms prior to any exogenous stimulation. The model developed provides an alternative method to generate IPF-related bronchial epithelial phenotypes in vitro, through the direct co-culture of human lung fibroblasts with NHBEs. These findings highlight the importance of fibroblast TGFβ signaling in EMT but that monocultures give rise to differential responses compared to co-cultures, when exposed to this pro-inflammatory stimulus. This holds implications for any translation conclusions drawn from monoculture studies and is an important step in development of more biomimetic models of IPF. In summary, we believe this in vitro system to study fibroblast-epithelial crosstalk, within the context of IPF, provides a platform which will aid in the identification and validation of novel targets.