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Abstract The use of decellularized whole-organ scaffolds for bioengineering of organs is a promising avenue to circumvent the shortage of donor organs for transplantation. However, recellularization of acellular scaffolds from multicellular organs like the lung with a variety of different cell types remains a challenge. Multipotent cells could be an ideal cell source for recellularization. Here we investigated the hierarchical differentiation process of multipotent ES-derived endoderm cells into proximal airway epithelial cells on acellular lung scaffolds. The first cells to emerge on the scaffolds were TP63+ cells, followed by TP63+/KRT5+ basal cells, and finally multi-ciliated and secretory airway epithelial cells. TP63+/KRT5+ basal cells on the scaffolds simultaneously expressed KRT14, like basal cells involved in airway repair after injury. Removal of TP63 by CRISPR/Cas9 in the ES cells halted basal and airway cell differentiation on the scaffolds. These findings suggest that differentiation of ES-derived endoderm cells into airway cells on decellularized lung scaffolds proceeds via TP63+ basal cell progenitors and tracks a regenerative repair pathway. Understanding the process of differentiation is key for choosing the cell source for repopulation of a decellularized organ scaffold. Our data support the use of airway basal cells for repopulating the airway side of an acellular lung scaffold.