The putative progenitor alveolar epithelial type II (ATII) cells restore epithelial barrier integrity by transdifferentiating into alveolar type I (ATI) cells. We investigated to see whether inhibition of histone deacetylases (HDAC) could reverse epithelial to mesenchymal (EMT) like intermediate phenotype during differentiation of ATII cells. METHODS: Primary human ATII cells in monolayer or co-cultured with fibroblasts were treated with 5µM of HDAC inhibitor (HDACi) MS-275 (MS) and 10ng/ml of TGFβ to assess molecular targets. RESULTS: MS upregulated the gradual downregulated expression of surfactant protein C (SPC) - marker of ATII cells - in both monolayer and co-culture (p<0.05). MS alone or in combination with TGFβ salvaged TGFβ induced downregulation of SP-C (p<0.05) in both monolayer and co-culture (p<0.05). Moreover, TGFβ induced expression of type I collagen was downregulated by MS (p<0.05). Advanced glycosylation end product-specific receptor (RAGE), a marker of ATI cells which was upregulated in the culture (p=0.006) was downregulated by MS (day 6: p=0.003). TGFβ upregulated expression of Slug, a marker of EMT (day 2 p=0.050 and day 6 p=0.031), was downregulated with MS and TGFβ combination (day 5 p=0.000; day 6 p=0.006). The expression of HOP homeobox (Hop) shown to negatively regulate surfactant production in pulmonary epithelial cells was upregulated in ATII cells (p=0.028). MS alone (p=0.023) or in combination with TGFβ (p=0.015) downregulated the expression of Hop. CONCLUSION: These results show that HDAC inhibitors may regulate EMT-like phenotype during transdifferentiation of ATII cells and promote expression of SPC by repression of transcription factor Hop.