Functional modeling of many adult epithelia is limited by the difficulty in maintaining relevant stem cell populations in culture. Here, we show that dual inhibition of SMAD signaling pathways enables robust expansion of primary epithelial basal cell populations. We find that TGFβ/BMP/SMAD pathway signaling is strongly activated in luminal and suprabasal cells of several epithelia, but suppressed in p63+ basal cells. In airway epithelium, SMAD signaling promotes differentiation, and its inhibition leads to stem cell hyperplasia. Using dual SMAD signaling inhibition in a feeder-free culture system, we have been able to expand airway basal stem cells from multiple species. Expanded cells can produce functional airway epithelium physiologically responsive to clinically relevant drugs, such as CFTR modulators. This approach is effective for the clonal expansion of single human cells and for basal cell populations from epithelial tissues from all three germ layers and therefore may be broadly applicable for modeling of epithelia.