The T helper 2 (Th2) inflammatory cytokine interleukin-13 (IL-13) has been associated with both obstructive and fibrotic lung diseases; however, its specific effect on the epithelial stem cells in the gas exchange compartment of the lung (alveolar space) has not been explored. Here, we used in vivo lung models of homeostasis and repair, ex vivo organoid platforms, and potentially novel quantitative proteomic techniques to show that IL-13 disrupts the self-renewal and differentiation of both murine and human type 2 alveolar epithelial cells (AEC2s). Significantly, we find that IL-13 promotes ectopic expression of markers typically associated with bronchiolar airway cells and commonly seen in the alveolar region of lung tissue from patients with idiopathic pulmonary fibrosis. Furthermore, we identify a number of proteins that are differentially secreted by AEC2s in response to IL-13 and may provide biomarkers to identify subsets of patients with pulmonary disease driven by "Th2-high" biology.