Lung epithelial repair depends on progenitor cell populations located in specific niches, but little is known about the signalling crosstalk occurring between the progenitors and their niches in homeostasis and post-injury repair. Kim and colleagues have set up a 3D co-culture system of bronchioalveolar stem cells (BASCs) and lung-derived endothelial cells to obtain colonies growing from single BASC clones (Cell 156, 440–455; 2014). These clones expand to differentiate into three types of colonies: bronchiolar, bronchioalveolar or alveolar structures. They find that the multipotentiality of the bronchioalveolar structures obtained was conserved following multiple passages or subcutaneous transplantations. They noticed that secretion of thrombospondin-1 (Tsp1) from the endothelial cells increased after injury, and that the lung endothelial cells defective for Tsp1 lost their capacity to induce alveolar differentiation. They also observed impaired alveolar repair in Tsp1-null mice. Further analysis led the authors to delineate that the growth factor BMP4 produced after injury activates NFAT-dependent Tsp1 production in endothelial cells to drive alveolar differentiation and repair. This 3D co-culture system will help in the analysis of maintenance and repair of lung stem cells in homeostasis and repair.