Lipid-laden cells (initially named lipid-interstitial cells, LIC, and later termed lipofibrobasts, LiF) were first observed in the pulmonary alveolar interstitium of rats and mice during the saccular and alveolar stages of development (7,10). Their location and neutral rather than phospholipid storage granules distinguished them from alveolar type 2 (AT2) epithelial cells and macrophages, and their proliferation kinetics distinguished them from interstitial cells that lacked lipid granules (3). The LiF population peaked during the first two postnatal weeks, when plasma chylomicrons and very-low-density lipoproteins were elevated (3,15). When cultured, the lipid granules dissipated and the cells contained ACTA2 and produced elastin, but lipid storage could be enhanced by exposure to neonatal rat serum or peroxisome proliferator-activated receptor agonists (14, 17). When fibroblasts, which had been isolated in the saccular stage and loaded with [ 3 H]triolein, were cocultured with AT2 cells, the triolein was observed in surfactant lipoproteins, leading to the hypothesis that LiF provide surfactant lipids when alveoli rapidly increase in number (26). Comparable to hepatic stellate cells, LiF store retinyl esters, an endogenous precursor for retinoic acid, which supports elastin synthesis and alveolar formation (16). However, an understanding of the function of LiFs was limited by the transient presence of lipid granules and because the cells lost the granules when cultured.With the development of more sensitive tools to analyze gene expression and proteins in small populations or individual cells, the unique phenotype of LiFs has been defined at a molecular level during alveolarization and during compensatory lung growth after pneumonectomy (1, 6). Signaling by PDGF-A through platelet-derived growth factor receptor-␣ (PDGFR␣) is required for alveolarization, and LiF express PDGFR␣, but their lineage is not directly defined by PDGF-A signaling (25). Lineage-tracing established that sonic hedgehog signaling differentiates fibroblast progenitors to a myofibroblast (MF), ␣-smooth muscle actin (␣SMA)-containing phenotype before postnatal day 2 (P2) when Lif progenitors begin to express the differentiated adipocyte protein perilipin 2 (adipose differentiation-related protein, ADRP), the protein that encapsulates neutral lipid droplets (11,12,21). Myofibroblast differentiation depends on inactivation of a Wnt inhibitory pathway and on sustained sonic hedgehog signaling. Lipofibroblasts are most abundant from P4 to P8 and exhibit other markers of white adipocyte-like differentiation [transcription factor-21 (Tcf21)] and G 0 /G 1 switch protein-2 (GOS2) (18).