All animal work was conducted according to relevant national and international guidelines as approved by the University of Washington Institutional Animal Care and Use Committee (IACUC) under Protocol Number 2164-04.
Expansion of H7 hES Cells
NIH approved (NIH code WA07) undifferentiated hES cell line H7 was obtained from WiCell Research Institute (Madison, WI) 
, and cells from passage 25 to 35 were used. For propagation of the H7 cells in undifferentiated state, the ES cells were initially grown on primary mouse embryonic fibroblast (MEF) feeder cells prepared from timed pregnant CF-1 female mice (day 13.5 of gestation) that had been γ-irradiated with 3000 rads for 5 min, and then directly in conditioned medium in which the above γ-irradiated MEF cells were cultured to ensure purity of human cells and progressively eliminate any mouse feeders from the cultures. The medium contained Dulbecco's Modified Essential Medium (DMEM), 10% heat-inactivated fetal bovine serum (FBS), and 2 mM L-glutamine as described previously 
. The hES cells were cultured in ES medium [i.e., knockout (KO) DMEM supplemented with 20% knock-out serum replacement (KOSR; Invitrogen, Carlsbad, CA), 1 mM sodium pyruvate, 0.1 mM 2β-mercaptoethanol (ME) (Sigma-Aldrich Corporation, St Louis, MO), 0.1 mM minimum essential media (MEM), 1% nonessential amino acids (NEAA; Mediatech, Herndon,VA), 1 mM L-glutamine, and 2 ng/ml basic fibroblast growth factor (bFGF) (R&D Systems, Minneapolis, MN)]. For cell culture, 6-well 10 cm2
tissue culture plates, coated with 0.1% gelatin were used, and all cultures were done in a humidified 5% CO2
incubator at 37°C. The protocol for induction of alveolar epithelial differentiation of hES cells was adapted from established methods 
, as shown in .
Embryoid Body Formation
On the day of passage, hES cell colonies were inspected, and only hES cell cultures containing colonies with well-defined boundaries and minimum differentiation were used. Undifferentiated hES cells were treated with 1.2 U/ml dispase (Invitrogen) dissolved in Ca2+- and Mg2+-free phosphate-buffered saline (PBS; Mediatech) supplemented with 10% ES cell-qualified fetal bovine serum (FBS; Invitrogen) at 37°C until the hES cell colonies nearly detached from the plates. Colonies were then washed off the plates, washed twice in ES cell medium without bFGF, and resuspended in EB medium [i.e., KO DMEM, 20% KOSR, 20% non-heat-inactivated fetal calf serum, 1% NEAA, 1 mM L-glutamine, and 0.1 mM 2β-ME]. Cells were transferred to Corning 6-well ultra-low attachment plates (Corning Inc. Lifesciences, Lowell, MA) and grown for 4 days in suspension culture in ultra-low attachment plates.
Generation of Non-ciliated Pulmonary Epithelial Cells
Two different culture media were employed to generate non-ciliated pulmonary epithelial cells. EBs were transferred to adherent culture in 0.1% gelatin-coated tissue culture plates by limited dispase digestion. One group of EBs was cultured for 12 days in small airways growth medium (SAGM) [i.e., Clonetics small airways basal medium (Cambrex Bioscience, Walkersville, MD), bovine pituitary extract 30 µg/ml, insulin 5 µg/ml, hydrocortisone 0.5 µg/ml, gentamycin sulfate-amphotericin B 0.5 µg/ml, bovine serum albumin 0.5 mg/ml, transferrin 10 µg/ml, epinephrine 0.5 µg/ml, and recombinant human epidermal growth factor (rh EGF) 0.5 ng/ml] refreshing media every other day. Retinoic acid 0.1 ng/ml and triiodothyronine (6.5 ng/ml) were excluded from SABM following Ali et al. 
. From the day 12 culture in SAGM, alveolar epithelial cells were flow sorted based on surface expression of SP-C and AQP-5. The >90% SP-C+
flow-sorted cells were grown in the SAGM medium for 4 more days.
A second group consisted of EBs cultured in bronchiolar epithelial growth medium (BEGM) [i.e., Clonetics bronchiolar epithelial basal medium (Cambrex Bioscience), bovine pituitary extract 30 µg/ml, insulin 5 µg/ml, hydrocortisone 0.5 µg/ml, gentamycin sulfate-amphotericin B 0.5 µg/ml, retinoic acid 0.1 ng/ml, transferrin 10 µg/ml, triiodothyronine 6.5 ng/ml, epinephrine 0.5 µg/ml, and rh EGF 0.5 ng/ml] and fed similarly every other day with fresh medium.
Phenotypic Analysis of Cells
Immunostaining was performed using specific antibodies conjugated to various fluorochromes such as fluorescein isothiocyanate (FITC), phycoerythrin (PE), allophycocyanin (APC), peridinin chlorophyll protein (PerCP-Cy5.5), and CyChrome (PE-Cy5 and PE-Cy7). The following BD Biosciences Pharmingen (San Diego, CA) antibodies were used for cell surface staining: APC-conjugated CD45 (30F-11), FITC-conjugated CD3 (145-2C11), PE-Cy5-conjugated B220 (RA3-6B2), APC-conjugated GR-1 (RB6-8C5), PE-conjugated Mac1 (M1/70), FITC-conjugated Sca-1, and PE-Cy7-conjugated CD117 (c-kit). PE-Cy5-conjugated F4/80 [Cl: A3-1 (F4/80)] was obtained from Serotec Ltd., Oxford, UK. Purified antibodies (clone number/catalog number/antibody type/concentration) to the following mouse antigens were obtained from Santa Cruz Biotechnology (Santa Cruz, CA): SSEA-3 (631/sc-21703/rat monoclonal IgM/200 µg/ml), SSEA-4 (813-70/sc-21704/mouse monoclonal IgG3/200 µg/ml), Oct-3/4 (H-134/sc-7705/goat polyclonal IgG/200 µg/ml), SP-C (C-19/sc-7705/goat polyclonal IgG/200 µg/ml), SP-D (245-01/sc-59695/mouse monoclonal IgG1/100 µg/ml), AQP-1 (L-19/sc-9878/goat polyclonal IgG/200 µg/ml), AQP-5 (G-19/sc-9890/goat polyclonal IgG/200 µg/ml), CC-10 (S-20/sc-9773/goat polyclonal IgG/200 µg/ml), EGF (C-20/sc-1341/goat polyclonal IgG/200 µg/ml, VEGF (P-20/sc-1836/goat polyclonal IgG/200 µg/ml), TTF-1 (G-17/sc-12524/goat polyclonal IgG/200 µg/ml), CD31 [i.e., platelet endothelial cell adhesion molecule (PECAM-1); V-16/sc-31045/goat polyclonal IgG/200 µg/ml], and goat anti-mouse IgG3-FITC (sc-2081/pre-adsorbed, affinity-purified secondary antibody raised in goat against mouse IgG3 and conjugated to FITC/400 µg/ml). Irrelevant isotype-matched antibodies were used as controls. FITC-conjugated donkey anti-goat or goat anti-rabbit secondary antibodies were used following incubation with the primary antibodies. In situ immunostaining with specific FITC- or PE-conjugated antibodies (and DAPI counterstaining the nuclei of the cells) or ABC staining (DAKO) was done following the manufacturer's protocol. 106 cells were taken per sample in 50 µl cell suspension in ice cold PBS (1×); 105 events were recorded per sort.
For simultaneous surface and intracellular staining, cell-surface antigens were stained as follows: 1 µl conjugated antibody/106 cells in suspension culture for 30 min on ice. After thorough washing, cells were fixed in 4% paraformaldehyde in PBS by vortexing, and incubated at room temperature (RT) for 20 min followed by permeabilization in either 0.1% Tween-20 or 0.25% Triton-X. Intracellular staining was performed with readouts made on a FACScalibur. Different conjugates with widely separated excitation spectral range were used for separating the surface vs. intracellular probes (e.g., PE vs. FITC, FITC vs. APC, APC vs. PE, or APC vs. Cyc-PE).
Cell suspension of 106 cells per microfuge tube was prepared per sample and staining was done by a single step with a master mix of fluorochrome-conjugated monoclonal antibodies or in some cases where the primary antibody was not available in a directly fluorochrome-conjugated form, in two steps of primary unlabeled antibody followed by cross reactive fluorochrome-conjugated specific secondary antibody at 4°C for 30 min followed by rigorous washing (twice) with ice cold PBS. The stained cell preparation was finally resuspended in 50 µl PBS (with 1% bovine serum albumin) and read by FACSCalibur (BD Immunocytometry Systems, San Jose, CA) by using the CELLQuest program. Cells were viewed at first keeping at Side Scatter (SSC; X-axis) and Forward Scatter (FSC; Y-axis) and dead cells gated out by annexin V staining. CD45− cells were then gated out to preempt any blood cells in the lungs, and 105 events were recorded per sample. The unstained axis was FL-3H. In undifferentiated H7 cells, single staining with each antibody was done for TTF-1, Oct3/4, SSEA-3, and SSEA-4. Data from three independent experiments with each sample sorted in triplicate were pooled, and mean ± SEM reported.
Viable cells were measured by propidium iodide exclusion using flow cytometry and trypan blue dye exclusion by light microscopy.
Clonogenic Growth of Cells Derived from hES Cells
To quantitate committed progenitors, CFU-C assays were performed using methylcellulose semisolid media (Stemgenix, Amherst, NY) supplemented with an additional 50 ng of stem cell factor per ml (Peprotech, Rocky Hill, NJ) to promote growth of hematopoietic progenitors. Next, 0.01×106 cells from lung were plated on duplicate 35-mm culture dishes and incubated at 37°C in a 5% CO2-95% air mixture in a humidified chamber for 7 days. Colonies generated by that time were counted using a dissecting microscope, and all colony types (i.e., BFU-E, CFU-E, CFU-G, CFU-GEMM, CFU-GM, and CFU-M) were pooled and reported as total CFU-C. Aliquots of 1–10×104 cells were plated per 1 ml of semisolid methylcellulose (CFU-lite with Epo, Miltenyi Biotech, or complete human methycellulose medium, Stem Cell Technologies, Vancouver, BC, Canada). CFU-C frequency was scored morphologically after 10 to 14 days in culture at 37°C, 5% CO2, in a humidified incubator.
Mouse Model of Pulmonary Fibrosis and Transplantation of Differentiated H7 hES Cells
Rag2γC double KO mice (Raγ2γC−/−
) from Taconic (Hudson, NY) 
were housed under specific pathogen-free conditions. A single intratracheal dose of 0.075 U/ml of bleomycin in 40 µl saline was administered (day 0). On day 7 after bleomycin treatment, mice were irradiated sub-lethally (300R) prior to transplant to minimize the possibility of graft rejection and then transplanted with 105
differentiated hES cells intratracheally in a 50 µl volume. Transplant groups consisted of cells from day 12 in culture with SAGM alone (Bleo/hES+SAGM group) or with treatment of 5 µM ICG-001 for 6 h at 37°C (Bleo/hES+SAGM+ICG-001 group). Before transplantation, cells were incubated for 30 min at 37°C with a pro-survival cocktail composed of 10 mM ZVAD-FMK (Promega, Madison, WI), 50 nM Bcl-XL BH4 (Transduction Laboratories, Lexington, KY), 0.2 µM cyclosporine A (Sigma-Aldrich Corporation), 100 ng/ml recombinant mouse insulin-like growth factor-1 (IGF-1, Santa Cruz Biotechnologies), and 50 µM of the KATP
channel opener pinacidil (Sigma-Aldrich Corporation) 
. The cells were heat-shocked for 30 min at 42°C in a water bath followed by return to 37°C before transplantation. The pro-survival cocktail was not included in the injectate. Control groups consisted of mice treated intratracheally (50 µl) with either saline (Saline group) or bleomycin (Bleo/Saline group) on day 0 and saline on day 7.
Mice were sacrificed on day 14 with the total number of cells and CFU-C in bone marrow, spleen, blood, lungs, and bronchoalveolar lavage (BAL) fluid determined. Both femurs were flushed to obtain bone marrow. After intraorbital bleeding, blood counts were extrapolated to a total volume of 2 ml (i.e., total blood volume in 20 gm mouse). Parenchymal cells of a single lung were obtained by enzymatic digestion with 0.1% collagenase type IV for 60 min at 37°C. Cell subsets in BAL fluid (i.e., macrophages, lymphocytes, and neutrophils as a percentage of total leukocytes) were quantitated by monoclonal antibodies conjugated with fluorochromes gated as CD45+ cells in FACScan. Analysis of single cell suspensions of cell populations was done by enzymatic digestion with 0.1% collagenase type IV for 60 min at 37°C for detachment from lung tissue, followed by cell counting in Coulter counter and cell subset identification and quantitation by flow cytometry. Lung tissue was extracted for total RNA for qPCR and sections obtained for histochemistry/immunocytochemistry.
Analysis of Colony Forming Units in Tissue Compartments
The number of bone marrow CFU-C counted 7 days after culture in semi-solid methylcellulose supplemented with 50 ng/ml stem cell factor was calculated as per single femur. Typically 50,000 cells were plated per ml. The number of blood CFU-C grown in semi-solid methylcellulose medium for 7 days was determined per ml of plated heparinized whole blood. The number of splenic CFU-C grown after 7 days in methylcellulose with 500,000 splenocytes plated was extrapolated to total number of splenocytes in one spleen. The number of CFU-C grown after 14 days of culture in semi-solid methylcellulose medium plated with 1×106 cells from dispase-digested mouse lung was calculated on total number of cells obtained from a single lung. The number of CFU-C grown after 14 days of culture in semi-solid methylcellulose medium plated with 1×106 BAL fluid cells was calculated on the total number of cells obtained from BAL fluid from a single lung. The cells were derived from Rag2γC double knockout mice that were sub-lethally irradiated prior to xenograft transplantation with human H7 cells. Thus, progenitor numbers were lower than expected because a) the recipients were severely immunocompromised, b) they were irradiated already depleting progenitor reservoir in their tissues, and c) the 1 week period of homing and engraftment allowed in the experiment was very short to reduce the possibility of teratoma formation. Cells were counted on a Leica DMIL inverted microscope (10×) and photographed with a Canon Power Shot S50 digital camera; at least 40-cell colonies were considered.
Total RNA was extracted from cultured cells (<500/sample) by PicoPure RNA isolation kit (Arcturus, Mountain View, CA). For isolation of total lung RNA, 600 µl of lysing buffer was added to disrupted lung tissue in a 1.5-ml microfuge tube, and lysate was loaded onto a QIAshredder column and centrifuged for 2 min at 13,000 rpm. The homogenized lysate was then mixed with 600 µl of 70% ethanol and applied to an RNeasy mini spin (QIAGEN Inc, Valencia, Calif) column for centrifugation for 15 sec at 13,000 rpm. Next, 700 µl of buffer RW1 and buffer RPE was added and centrifuged sequentially for washing twice. Then, 60 µl of ribonuclease-free water was used to elute total RNA from the RNeasy mini spin column. All total RNA used in the experiments was pure as determined by the ratio of absorbance (A) at 260 vs. 280 nm (A260/A280 ratio >1.9) and stored at −80°C.
cDNA was made using Superscript III system from Invitrogen and qPCR performed. For qPCR performed in duplicate tubes, the PCR reaction solution contained 0.5 µg of total RNA, 6 mM magnesium chloride, and 0.5 µM of each primer (primer oligonucleotide sequences shown are in Table S1
in the online supporting information. Other components in the reverse transcriptase PCR master mix included buffer, enzyme, SYBR Green I, and deoxyribonucleotide triphosphate. For reverse transcription, the 20 µl of reaction capillaries were incubated at 50°C for 2 min followed by denaturation at 95°C for 10 min. PCR by initial denaturation at 95°C for 15 sec was followed by annealing at 60°C for 1 min, repeated 45 cycles. Finally, a melting curve analysis was performed by following the final cycle with incubation at 95°C for 15 sec, 60°C for 15 sec, and 95°C for 15 sec. Negative control samples for the qPCR analysis that contained all reaction components except RNA, were performed simultaneously to determine when the nonspecific exponential amplification cycle number was reached. Primers were synthesized by the University of Washington Biochemistry services using Primer Express software. qPCR was performed by the comparative Ct method with SYBR Green PCR core reagents (Applied Biosystems, Foster City, CA) and analyzed using Applied Biosystems 7900HT Real-Time PCR System software SDS 2.2.1.
Analysis of Collagen Content in Lung
Masson's trichrome and Sirius red stains were used to detect collagen deposition in the lungs 
. Total amount soluble collagen in the lung was determined as the mean of triplicate tubes for each sample by the Sircol™ quantitative dye-binding collagen assay (Biocolor Ltd., Newtownabbey, Northern Ireland, UK) 
Detection of Human Cells in Mouse Lung
Three methods were employed to detect engrafted derived cells in mouse lung: 1) detection of Alu sequence in transplanted mouse lung RNA was performed by qPCR, using the following primers: GTCAGGAGATCGAGACCATCCC
(forward sequence) and TCCTGCCTCAGCCTCCCAAG
(reverse sequence), Alu elements are specific to the human genome and are present at ~1 million copies/diploid sequence, making them a sensitive indicator of human cell content. 2) Immunocytochemistry was performed using a mouse anti-human nuclei IgG1
monoclonal antibody (clone 235-1, catalog number: MAB1281; Millipore Corporation, Billerica, MA) that stains nuclei of all human cell types giving a diffuse nuclear pattern with no reactivity against mouse in immunohistochemistry. 5 µm thick sections of 2% paraformaldehyde-fixed OCT-embedded frozen lung tissue were blocked with goat serum at RT for 1 h followed by incubation with the anti-human nuclei antibody overnight at 4°C. After washing in PBS and incubation with secondary goat anti-mouse antibody for 1 h at RT, ABC staining (Vector Laboratories Inc.) was performed following the manufacturer's protocol; and 3) in situ
hybridization in mouse transplanted lung sections with human-specific pan-centromeric probe was performed in 8 µm thick, methyl carnoy-fixed paraffin-embedded lung sections following the protocol described previously 
For immunohistochemistry with non-conjugated antibodies, paraffin-embedded lung tissue was deparaffined in xylene, and rehydrated in 100% and 95% ethyl alcohol. Endogenous peroxidase was quenched in methanol with 0.3%–3% hydrogen peroxide for 30 min at RT. Blocking was done for 1 h at RT in PBS containing Ca2+ and Mg2+ with 1.5% non-immune serum of the species in which the secondary antibody was made. The primary antibody was incubated for 1 h at RT followed by 3 washes in PBS at RT. The secondary antibody was applied and incubated. ABC staining (Vector Laboratories Inc, Burlingame, CA) was performed following the manufacturer's protocol.
Photographs were taken with a Leica DMIL inverted microscope (Leica Microsystems GmbH, Wetzlar, Germany) and a Zeiss ApoTome (Carl Zeiss Microimaging GmbH, Göttingen, Germany). IF photographs were taken with a Zeiss Axiovert 200 M microscope and Axiocam MRm and merged using Axiovision 4.6 software.
Transmission electron microscopy
For transmission electron microscopy, the cells were fixed with warm ½ Karnovsky's fixative (1
1 with buffer) after removal of the culture medium and washed with 0.1 M cacodylate buffer for 10 min. After the fixative was removed, the sections were incubated in pure fixative for 30–60 min. The cells were gently scraped using a standard Sarstedt cell scraper, and placed into Eppendorf tubes and spun down at 1500 rpm for 5 min. After addition of new fixative, the cells were resuspended and stored at 4°C overnight. After 3 washes for 5 min in 0.1 M cacodylate buffer, cells were centrifuged and 1% osmium tetroxide in 0.1 M cacodylate buffer added and incubated for 1–2 h at 4°C followed by 3 washes in 0.1 M cacodylate buffer for 5 min. Dehydration was done in graded series of ethyl alcohol (i.e., 50%, 70%, 95%, 2×100%) for 15 min and two washes in propylene oxide for 15 min. Embedding was done in 1
1 propylene oxide/Epon resin overnight with Eppendorf tubes capped. The next day, cells were centrifuged and fresh 100% Epon resin added for 2–4 h. Polymerization was done in a 60°C oven overnight in Eppendorf tubes. 70–100 nm thick sections were made on a copper grid using a Leica EM UC6 ultramicrotome (Leica Microsystems GmbH, Wetzlar, Germany). Sections were viewed in a JEOL JEM-1230 transmission electron microscope (JEOL Ltd., Tokyo, Japan), equipped with an Ultrascan 1000™ 2k×2k CCD camera (Gatan, Inc., Pleasanton, CA), and photomicrographs taken using Gatan Digital Microscope software.
The data are reported as mean ± SEM. Statistical differences among samples were tested by Student's t test. P value<0.05 was considered statistically significant.