Type I alveolar epithelial cells (ATIs) are very large, thin cells, which extend across several air sacs and cover more than 95% of the alveolar surface area. ATIs are the target of many insults, including ventilator-induced lung injury, and are generally considered terminally differentiated cells arising from type II cell (ATII) lineage. ATIs have proven difficult to harvest and maintain in primary culture, which is why much of ATI biology has been inferred from studies on ex vivo, ATII-derived, so-called ATI-like cells. We report on a modified approach to rat ATI harvest and primary culture, which yielded the following observations: (1) rat ATI can be harvested and maintained with a high degree of purity in primary culture; (2) in vitro growth characteristics of primary ATIs differ from those of ATII-derived ATI-like cells; ATIs, but not ex vivo, ATII-derived ATI-like cells, are capable of cell division; (3) ATIs readily repair plasma membrane wounds without the subsequent loss of their ability to divide; (4) ATI monolayers heal scratch wounds primarily by cell spreading and migration. Although the ability of ATIs to divide may be limited to the in vitro environment, we do believe that their role in alveolar wound repair deserves to be revisited, and the molecular control of ATI–ATII plasticity further explored.