Type I pneumocytes (squamous alveolar cells) are responsible for gas exchange in the alveoli and cover a majority of the alveolar surface area (>95%). While type I pneumocytes account for most of the surface area, they are approximately half as numerous as type II cells, due to differences in size. Type I pneumocytes are large, thin cells stretched across a large surface area, while type II pneumocytes are smaller cells.

Type I pneumocytes are unable to replicate and are susceptible to toxic insults. In the event of damage, Type II cells can proliferate and/or differentiate into type I cells to compensate.

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