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Chronic Obstructive Pulmonary Disease (COPD) is a progressive respiratory disease characterized by airway inflammation and abnormal alveolar enlargement. It is the third leading cause of death around the world. Although extensive research efforts have been made, there is still no curable treatment available for lung tissue damage in patients with COPD. Therefore, it is of great significance to elucidate the mechanisms of tissue damage and repair in COPD. As the first barrier against environmental insults and pathogens, pulmonary epithelial cells play an essential role in regulating injury response and repair. However, how pulmonary epithelial cells contribute to irreversible alveolar destruction in COPD is not well understood. In this study, we elucidated the mechanisms of epithelial cell damage in both cigarette smoke-induced COPD and alpha1 antitrypsin deficiency (AATD)-associated genetic COPD. To investigate alveolar epithelial cell damage and repair in cigarette smoke-induced emphysema, a lineage tracing model was utilized to fluorescently label and chase alveolar type II (AT2) epithelial cells, the adult progenitor cells in the alveolar epithelium. An assessment of cigarette smoke-induced changes in cellular composition and regenerative capacity of the alveolar epithelial cells was performed. Cigarette smoke was found to impede the AT2-directed alveolar epithelial regeneration and repair process, and this impaired progenitor cell function was not restored after smoke cessation. Moreover, comparison analysis between stains that are sensitive and resistant to smoke-induced damage revealed that deficiency in lipid metabolism may contribute to the dysregulation of alveolar epithelial repair by AT2 cells. Restoring alveolar progenitor functions through lipid metabolism may serve as a novel therapeutic for alveolar destruction in smoke-induced COPD. To explore the mechanism of epithelial damage in AATD-associated genetic COPD, we utilized a PiZ (p.Glu342Lys) transgenic mouse model expressing human ZAAT protein. Morphometric analysis of PiZ lungs suggests that the accumulation of ZAAT polymers in the lung directly leads to the spontaneous development of emphysema. To investigate epithelial damage induced by zAAT accumulation, we isolated the epithelial cell population from the lung of PiZ mice. We identified epithelial-specific expression of cleaved caspase 3, indicating a direct cytotoxic effect of ZAAT in impairing epithelial function and inducing epithelial cell death. Future therapeutics could directly target the cytotoxicity of pulmonary epithelial cells in AATD to reduce lung tissue damage. Overall, our findings suggest that pulmonary epithelial damage plays an essential role in the pathogenesis of lung tissue damage in COPD. Future epithelial cell-based therapies may contribute to pulmonary re-epithelialization and tissue repair in both cigarette smoke-induced and AATD-associated COPD.