Epithelial proliferation yields abundant transitional cells with incomplete type 1 alveolar epithelial cell (AEC1) differentiation in coronavirus disease 2019 (COVID-19) acute respiratory distress syndrome. A: Immunostaining reveals KRT8hi transitional cells that are sometimes cuboidal and isolated (open yellow arrowhead) or existing in pairs (closed yellow arrowhead) or hyperplastic (orange arrowhead), suggestive of recent cell division. Transitional cells are often partially spread (open white arrowhead) and occasionally flat (closed white arrowheads). B: Transitional cells do not express pro–surfactant protein C (proSPC) and are abundant in areas devoid of proSPC+ cells. C: Sections were stained for KRT8 and the AEC1 marker HTI-56. KRT8hi transitional cells fill gaps denuded of AEC1s on alveolar septa. Some are cuboidal (open yellow arrowheads); most are partially spread (open white arrowheads). Occasional transitional cells approach a flat AEC1 morphology but do not express AEC1 markers (closed white arrowhead), with rare exception (closed yellow arrowheads). Flat cells that express AEC1 markers but not KRT8 (closed green arrowhead) were interpreted as native AEC1s that were not damaged during lung injury. Findings suggest ongoing organized, albeit incomplete, AEC1 differentiation. Rare cells display bizarre morphologies and/or have sloughed into the airspaces (orange arrowheads), consistent with haphazard regeneration. n = 3. Scale bars = 50 μm.