Respiratory diseases, such as chronic obstructive pulmonary disease and pulmonary fibrosis, result in severely impaired quality of life and impose significant burdens on healthcare systems worldwide. Current disease management involves pharmacologic interventions, oxygen administration, reduction of infections, and lung transplantation in advanced disease stages. An increasing understanding of mechanisms of respiratory epithelial and pulmonary vascular endothelial maintenance and repair and the underlying stem/progenitor cell populations, including but not limited to airway basal cells and type II alveolar epithelial cells, has opened the possibility of cell replacement–based regenerative approaches for treatment of lung diseases. Further potential for personalized therapies, including in vitro drug screening, has been underscored by the recent derivation of various lung epithelial, endothelial, and immune cell types from human induced pluripotent stem cells. In parallel, immunomodulatory treatments using allogeneic or autologous mesenchymal stromal cells have shown a good safety profile in clinical investigations for acute inflammatory conditions, such as acute respiratory distress syndrome and septic shock. However, as yet, no cell-based therapy has been shown to be both safe and effective for any lung disease. Despite the investigational status of cell-based interventions for lung diseases, businesses that market unproven, unlicensed and potentially harmful cell-based interventions for respiratory diseases have proliferated in the United States and worldwide. The current status of various cell-based regenerative approaches for lung disease as well as the effect of the regulatory environment on clinical translation of such approaches are presented and critically discussed in this review.