The respiratory system, including the peripheral lungs, large airways and trachea, is one of the most recently evolved adaptations to terrestrial life. To support the exchange of respiratory gases, the respiratory system is interconnected with the cardiovascular system, and this interconnective nature requires a complex interplay between a myriad of cell types. Until recently, this complexity has hampered our understanding of how the respiratory system develops and responds to postnatal injury to maintain homeostasis. The advent of new single-cell sequencing technologies, developments in cellular and tissue imaging and advances in cell lineage tracing have begun to fill this gap. The view that emerges from these studies is that cellular and functional heterogeneity of the respiratory system is even greater than expected and also highly adaptive. In this Review, we explore the cellular crosstalk that coordinates the development and regeneration of the respiratory system. We discuss both the classic cell and developmental biology studies and recent single-cell analysis to provide an integrated understanding of the cellular niches that control how the respiratory system develops, interacts with the external environment and responds to injury.