Objective: To establish the co-culture model in vitro and induce bone marrow mesenchymal stem cells (MSCs) to differentiate into lung alveolar epithelial cells. Methods: Each group had 6 samples, control group was MSCs alone; Group A was the MSCs cultured with the cells from normal lung; and Group B was the MSCs with the cells from injuried lung. Each group was cultured for 8 days and the two markers of lung alveolar epithelial cells including AQP5 and SP-C were tested by laser confocal microscopy and RT-PCR. Results: Only AQP5 was detected in the control group and Group A, both AQP5 and SP-C were detected in Group B, the AQP5 mRNA expression in Group B was significantly increased compared with that in the control group(P <0.01). The AQP5 mRNA expression in Group B was also significantly increased compared with that in Group A (P < 0.01). But there was no significant difference in AQP5 mRNA expression between Group A and control group. Conclusion: We have successfully established the co-culture model in vitro to induce bone marrow mesenchymal stem cells to differentiate into lung epithelial cells.