Most chronic and acute lung diseases have no cure, leaving lung transplantation as the only option. Recent work has improved our understanding of the endogenous regenerative capacity of the lung and has helped identification of different progenitor cell populations, as well as exploration into inducing endogenous regeneration through pharmaceutical or biological therapies. Additionally, alternative approaches that aim at replacing lung progenitor cells and their progeny through cell therapy, or whole lung tissue through bioengineering approaches, have gained increasing attention. Although impressive progress has been made, efforts at regenerating functional lung tissue are still ineffective. Chronic and acute lung diseases are most prevalent in the elderly and alterations in progenitor cells with ageing, along with an increased inflammatory milieu, present major roadblocks for regeneration. Multiple cellular mechanisms, such as cellular senescence and mitochondrial dysfunction, are aberrantly regulated in the aged and diseased lung, which impairs regeneration. Existing as well as new human in vitro models are being developed, improved and adapted in order to study potential mechanisms of lung regeneration in different contexts. This review summarises recent advances in understanding endogenous as well as exogenous regeneration and the development of in vitro models for studying regenerative mechanisms.