Oxidative stress in lung often occurs in humans during acute lung injury (ALI) and in the acute respiratory distress syndrome. The lung inflammatory response may proceed to the development of pulmonary fibrosis, a devastating complication that occurs in premature infants after prolonged exposure to high oxygen concentrations. Oxidant‐related ALI can be induced by airway deposition of lipopolysaccharide or IgG immune complexes, resulting in activation of recruited neutrophils and residential macrophages, whose oxidants and proteases produce reversible ALI. In the presence of a powerful trigger of leukocytes (phorbol myristate acetate), or following intrapulmonary deposition of enzymes that generate oxidants, extensive endothelial and epithelial damage and destruction occurs, overwhelming repair mechanisms of lung and resulting in pulmonary fibrosis. How residential or circulating stem cells participate in regeneration of damaged/destroyed cells may provide clues regarding therapy in humans who are experiencing lung inflammatory damage.