Acute respiratory distress syndrome (ARDS) causes significant morbidity and mortality each year. There is a paucity of information regarding the mechanisms necessary for ARDS resolution. Foxp3+ regulatory T cells (Foxp3+ T reg cells) have been shown to be an important determinant of resolution in an experimental model of lung injury. We demonstrate that intratracheal delivery of endotoxin (lipopolysaccharide) elicits alveolar epithelial damage from which the epithelium undergoes proliferation and repair. Epithelial proliferation coincided with an increase in Foxp3+ T reg cells in the lung during the course of resolution. To dissect the role that Foxp3+ T reg cells exert on epithelial proliferation, we depleted Foxp3+ T reg cells, which led to decreased alveolar epithelial proliferation and delayed lung injury recovery. Furthermore, antibody-mediated blockade of CD103, an integrin, which binds to epithelial expressed E-cadherin decreased Foxp3+ T reg numbers and decreased rates of epithelial proliferation after injury. In a non-inflammatory model of regenerative alveologenesis, left lung pneumonectomy, we found that Foxp3+ T reg cells enhanced epithelial proliferation. Moreover, Foxp3+ T reg cells co-cultured with primary type II alveolar cells (AT2) directly increased AT2 cell proliferation in a CD103-dependent manner. These studies provide evidence of a new and integral role for Foxp3+ T reg cells in repair of the lung epithelium.