Scientists say they have made a significant step towards making human lungs for transplantation.
There is a shortage of donors for lung transplants
The UK team at Imperial College London took human embryonic stem cells and encouraged them to grow into cells found in adult lungs.
These lung cells are the type needed to allow oxygen to cross into the blood.
Eventually, it may be possible to make them from other stem cell sources such as bone marrow, the team told Tissue Engineering.
This would avoid some of the ethical concerns surrounding the use of embryonic tissue.
At the moment, it is possible to treat people using donor organs, but there is a big shortage meaning many do not get the life-saving treatment they need.
Stem cells are the body's "master cells" and can develop into a wide variety of different cell types.
The lung cells made in the laboratory by the Imperial team are known as mature small airway epithelium, which line the part of the lung where oxygen is absorbed and carbon dioxide is excreted.
As well as eventually being used to help make whole lungs for transplantation, the cells could also be used to repair parts of damaged lungs.
For example, Dr Anne Bishop and colleagues plan to use their findings to treat conditions such as acute respiratory distress syndrome (ARDS) - a condition which damages these lining cells and which currently kills many critically ill hospital patients.
However, much more work is needed.
Dr Bishop said: "Although it will be some years before we are able to build actual human lungs for transplantation, this is a major step towards deriving cells that could be used to repair damaged lungs."
Professor Stephen Spiro, professor of respiratory medicine at University College London Hospitals NHS Foundation Trust and spokesman for the British Lung Foundation, said: "This is very exciting, but there is a lot more work to do."
He said there were many other cell types that make up the lung that would be needed to make new organs.
But he said the cells that the Imperial team had made were crucial for lung function.
"It's always been a huge challenge to replace the damaged air sacks in ARDS. Maybe these cells will be the beginning of something," he said.
The work was supported by the Medical Research Council. The Imperial researchers plan to commercialise their findings through NovaThera.