The attrition of cells within organs necessitates replenishment from tissue resident progenitor populations. Study of the murine lung has suggested a number of niches present at different levels of the airways along the proximal-distal axis responsible for steady state epithelial turnover as well as response to catastrophic injury. Within the distal most bronchiole airspaces, injury resistant cells termed bronchioalveolar stem cells (BASCs) have been reported to reside at the bronchioalveolar duct junction (BADJ). Since the initial reporting of BASCs, controversy over their true nature has confounded progress towards useful application of insights from their biology towards new therapeutic modalities. We report that additional stratification of the Sca-1+, Pecam-, CD45- lung population with the surface marker CD24 yields to the identification of BASC cells in multiple cell populations. Among them, CD24high cells possess characteristics of stem/progenitor cells. Not only do these cells express molecular markers associated with embryonic pluripotency, but harbor self-renewal capacity and the potential to differentiate into multiple bronchial epithelium cell components when orthotopically transplanted in recipient mice. Transcriptional analysis of this cell population revealed activation of specific signaling pathways and the expression of distinct surface markers that unlike Sca-1 have human ortholog, thereby making them potentially useful in a clinical setting. We confirmed the serotonin receptor isoform 2B (HTR2B) was highly expressed and HTR2B axis components to be activated after naphthalene induced Clara cell ablation. Chemical inhibition of HTR2B manifests as a reduction in mitotic cells after injury and a deficit in re-epitheliazation. Furthermore, we observed that modulation of HTR2B impacts the commitment of cells towards different cell state. Activation of HTR2B results in increased number of cells locked in a mesenchymal cell state. Hence, HTR2B signaling is a novel component of the intricate signaling network regulating the homeostasis of bronchial epithelial progenitor of the distal airway. In principle, deregulation of HTR2B might be involved in the promotion of pathological conditions such as COPD, idiopathic fibrosis and NSCLC.