The adult lung contains several distinct stem cells, although their properties and full potential are still being sorted out. We previously showed that ectopic Sox2 expression in the developing lung manipulated the fate of differentiating cells. Here, we addressed the question whether fully differentiated cells could be redirected towards another cell type. Therefore, we used transgenic mice to express an inducible Sox2 construct in type II pneumocytes, which are situated in the distal, respiratory areas of the lung. Within three days after the induction of the transgene, the type II cells start to proliferate and form clusters of cuboidal cells. Prolonged Sox2 expression resulted in the reversal of the type II cell towards a more embryonic, precursor-like cell, being positive for the stem cell markers Sca1 and Ssea1. Moreover, the cells started to co-express Spc and Cc10, characteristics of bronchioalveolar stem cells. We demonstrated that Sox2 directly regulates the expression of Sca1. Subsequently, these cells expressed Trp63, a marker for basal cells of the trachea. So, we show that the expression of one transcription factor in fully differentiated, distal lung cells changes their fate towards proximal cells through intermediate cell types. This may have implications for regenerative medicine, and repair of diseased and damaged lungs.