Epithelial-mesenchymal cell competition coordinates fate transitions across tissue compartments during lung development and fibrosis.

Morphogenesis and cell state transitions must be coordinated in time and space to produce a functional tissue. In this study, we reveal that lung mesenchymal Yap levels and fitness antagonize epithelial Yap levels and stemness during lung development and repair following bleomycin injury. Elevated mesenchymal Yap signaling and fitness antagonize epithelial Yap levels and stemness, accelerating alveolar epithelial differentiation while impairing branching during lung development or bronchiolization after bleomycin injury. Conversely, mesenchymal Snail/Slug sequesters Yap/Taz to direct an adipogenic differentiation program towards alveolar fibroblast 1 (AF1) during both lung development and the resolution of pulmonary fibrosis. On the other hand, Yap/Myc-Tead binding instructs a myogenic differentiation program. Through our experiments and modeling, we identify tissue-scale mechanical cooperation as a pivotal factor in orchestrating organ formation and regeneration.