Mechanisms that regulate regional epithelial cell diversity and pathologic remodeling in airways are poorly understood. We hypothesized that regional differences in cell composition and injury-related tissue remodeling result from the type and composition of local progenitors. We used surface markers and the spatial expression pattern of an SFTPC-GFP transgene to subset epithelial progenitors by airway region. Green fluorescent protein (GFP) expression ranged from undetectable to high in a proximal-to-distal gradient. GFP^hi cells were subdivided by CD24 staining into alveolar (CD24^neg) and conducting airway (CD24^low) populations. This allowed for the segregation of three types of progenitors displaying distinct clonal behavior in vitro. GFP^neg and GFP^low progenitors both yielded lumen containing colonies but displayed transcriptomes reflective of pseudostratified and distal conducting airways, respectively. CD24^lowGFP^hi progenitors were present in an overlapping distribution with GFP^low progenitors in distal airways, yet expressed lower levels of Sox2 and expanded in culture to yield undifferentiated self-renewing progeny. Colony-forming ability was reduced for each progenitor cell type after in vivo bleomycin exposure, but only CD24^lowGFP^hi progenitors showed robust expansion during tissue remodeling. These data reveal intrinsic differences in the properties of regional progenitors and suggest that their unique responses to tissue damage drive local tissue remodeling.