Considerable progress has been made in understanding the basic mechanisms that regulate fluid and protein exchange across the endothelial and epithelial barriers of the lung under both normal and pathological conditions. Clinically relevant lung injury occurs most commonly from severe viral and bacterial infections, aspiration syndromes, and severe shock. The mechanisms of lung injury have been identified in both experimental and clinical studies. Recovery from lung injury requires the reestablishment of an intact endothelial barrier and a functional alveolar epithelial barrier capable of secreting surfactant and removing alveolar edema fluid. Repair mechanisms include the participation of endogenous progenitor cells in strategically located niches in the lung. Novel treatment strategies include the possibility of cell-based therapy that may reduce the severity of lung injury and enhance lung repair.