The lung is an architecturally complex organ comprising a heterogeneous mixture of various epithelial and mesenchymal lineages. We use single-cell RNA sequencing and signaling lineage reporters to generate a spatial and transcriptional map of the lung mesenchyme. We find that each mesenchymal lineage has a distinct spatial address and transcriptional profile leading to unique niche regulatory functions. The mesenchymal alveolar niche cell is Wnt responsive, expresses Pdgfrα, and is critical for alveolar epithelial cell growth and self-renewal. In contrast, the Axin2+ myofibrogenic progenitor cell preferentially generates pathologically deleterious myofibroblasts after injury. Analysis of the secretome and receptome of the alveolar niche reveals functional pathways that mediate growth and self-renewal of alveolar type 2 progenitor cells, including IL-6/Stat3, Bmp, and Fgf signaling. These studies define the cellular and molecular framework of lung mesenchymal niches and reveal the functional importance of developmental pathways in promoting self-renewal versus a pathological response to tissue injury.