Alveolar Type II Cell-derived MMP1high basal cells promote destructive microcysts in idiopathic pulmonary fibrosis

Alveolar microcysts, a hallmark of Idiopathic Pulmonary Fibrosis (IPF), are basal cell (BC)-lined structures that develop near terminal airways and correlate with poor clinical outcomes. Using primary-cell organoids and spatial transcriptomics, we identified striking epithelial similarities between respiratory bronchioles (RBs) and IPF alveolar microcysts, both containing AT0 (ABCA3 ⁺ /SCGB3A2 ⁺ ), SCGB3A2 ⁺ , and basaloid/BC populations, although basaloid/BCs were markedly expanded in IPF microcysts. A CEACAM6 ⁺ subset of normal RB epithelial cells, termed respiratory airway secretory cells (RASCs), consisted predominantly of SCGB3A2 ⁺ cells with only rare BCs (1–5%) that by RNA trajectory analysis suggested BCs arise from SCGB3A2 ⁺ progenitors. Accordingly, in organoid cultures nearly all RASC-derived colonies converted to BCs within 9 days, resembling colonies generated by purified BCs. BCs derived from either RASCs or normal alveolar type II (AT2) cells strongly expressed the collagenase matrix metalloproteinase-1 (MMP1), recapitulating the phenotype of BCs lining IPF microcysts. MMP1 ^high BCs degraded type I collagen ex vivo and generated microcyst-like structures in vivo following xenotransplantation, both abolished by MMP activity inhibition or specific MMP1 deletion by sh-RNAi. Finally, a Frizzled-5 WNT agonist antibody reversed the MMP1 ^high phenotype, identifying AT2- and RB-derived basal cell transdifferentiation as a previously unrecognized driver of alveolar destruction and microcyst formation in IPF and a potential therapeutic target.