Interstitial lung disease (ILD) is characterized by epithelial remodeling and accumulation of extracellular matrix, associated with inflammation. Pro-fibrotic mesenchymal signaling can initiate epithelial inflammation, exacerbated by oxygen therapy.We seek to understand ILD-related mesenchymal-epithelial crosstalk and bridge the gap of potential therapeutic strategies.In this study, we developed an organoid co-culture system of human stem cell-derived alveolar epithelial cells with ILD-patient fibroblasts in comparison to control fibroblasts. To identify secreted ligands associated with disease states, supernatants from untreated controls were compared to ILD fibroblasts cultured in 2D and analyzed by quantitative liquid chromatography mass spectrometry (LC-MS).Notably, alveolar organoid formation capacity, as well as the expression of surfactant protein B and C decreased, upon co-culture with ILD fibroblasts, demonstrating deranged mesenchymal signaling and reduced stem cell function towards regeneration and proliferation. Proteomic profiling was achieved with LC-MS. On average, more than 2000 proteins were detected in each sample, with 20 to 60 proteins significantly regulated in the respective conditions. ILD fibroblasts without further treatment showed 47 ligands significantly upregulated compared to non-diseased controls: CXCL1, CXCL3, glycoprotein Nmb (GPNMB), tissue factor pathway inhibitor-2 (TFPI2) and interleukin-11 were among the most abundant proteins, and highlight inflammatory signaling towards the epithelium.Our study identifies key mediators for the detrimental mesenchymal-epithelial crosstalk in ILD and their impact on alveolar organoids.