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Stem cell technologies, especially patient‐specific, induced stem cell pluripotency and directed differentiation, hold great promise for changing the landscape of medical therapies. Proper exploitation of these methods may lead to personalized organ transplants, but to regenerate organs, it is necessary to develop methods for assembling differentiated cells into functional, organ‐level tissues. The generation of three‐dimensional human tissue models also holds potential for medical advances in disease modeling, as full organ functionality may not be necessary to recapitulate disease pathophysiology. This is specifically true of lung diseases where animal models often do not recapitulate human disease. Here, we present a method for the generation of self‐assembled human lung tissue and its potential for disease modeling and drug discovery for lung diseases characterized by progressive and irreversible scarring such as idiopathic pulmonary fibrosis (IPF). Tissue formation occurs because of the overlapping processes of cellular adhesion to multiple alveolar sac templates, bioreactor rotation, and cellular contraction. Addition of transforming growth factor‐β1 to single cell‐type mesenchymal organoids resulted in morphologic scarring typical of that seen in IPF but not in two‐dimensional IPF fibroblast cultures. Furthermore, this lung organoid may be modified to contain multiple lung cell types assembled into the correct anatomical location, thereby allowing cell‐cell contact and recapitulating the lung microenvironment. Our bottom‐up approach for synthesizing patient‐specific lung tissue in a scalable system allows for the development of relevant human lung disease models with the potential for high throughput drug screening to identify targeted therapies. Stem Cells Translational Medicine 2017;6:622–633

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Bronchopulmonary dysplasia (BPD) is a common complication of premature birth. The histopathology of BPD is characterized by an arrest of alveolarization with fibroblast activation. The Wnt/β-catenin signaling pathway is important in early lung development. When Wnt signaling is active, phosphorylation of β-catenin by tyrosine kinases at activating sites, specifically at tyrosine 489 (Y489), correlates with nuclear localization of β-catenin. We examined fetal lung tissue, lung tissue from term newborns, and lung tissue from infants who died with BPD; we found nuclear β-catenin phosphorylation at Y489 in epithelial and mesenchymal cells in fetal tissue and BPD tissue, but not in the lungs of term infants. Using a 3D human organoid model, we found increased nuclear localization of β-catenin phosphorylated at Y489 (p-β-catenin) after exposure to alternating hypoxia and hyperoxia compared with organoids cultured in normoxia. Exogenous stimulation of the canonical Wnt pathway in organoids was sufficient to cause nuclear localization of p-β-catenin in normoxia and mimicked the pattern of α-smooth muscle actin (α-SMA) expression seen with fibroblastic activation from oxidative stress. Treatment of organoids with a tyrosine kinase inhibitor prior to cyclic hypoxia-hyperoxia inhibited nuclear localization of p-β-catenin and prevented α-SMA expression by fibroblasts. Posttranslational phosphorylation of β-catenin is a transient feature of normal lung development. Moreover, the persistence of p-β-catenin is a durable marker of fibroblast activation in BPD and may play an important role in BPD disease pathobiology.