Characterizing the stem cells responsible for lung repair and regeneration is important for the treatment of pulmonary diseases. Recently, a unique cell population located at the bronchioalveolar-duct junctions has been proposed to comprise endogenous stem cells for lung regeneration. However, the role of bronchioalveolar stem cells (BASCs) in vivo remains debated, and the contribution of such cells to lung regeneration is not known. Here we generated a genetic lineage-tracing system that uses dual recombinases (Cre and Dre) to specifically track BASCs in vivo. Fate-mapping and clonal analysis showed that BASCs became activated and responded distinctly to different lung injuries, and differentiated into multiple cell lineages including club cells, ciliated cells, and alveolar type 1 and type 2 cells for lung regeneration. This study provides in vivo genetic evidence that BASCs are bona fide lung epithelial stem cells with deployment of multipotency and self-renewal during lung repair and regeneration.