Smoking is the most important known risk factor for the development of lung cancer. Tobacco exposure results in chronic inflammation, tissue injury, and repair. A recent hypothesis argues for a stem/progenitor cell involved in airway epithelial repair that may be a tumor-initiating cell in lung cancer and which may be associated with recurrence and metastasis. We used immunostaining, quantitative real-time PCR, Western blots, and lung cancer tissue microarrays to identify subpopulations of airway epithelial stem/progenitor cells under steady-state conditions, normal repair, aberrant repair with premalignant lesions and lung cancer, and their correlation with injury and prognosis. We identified a population of keratin 14 (K14)–expressing progenitor epithelial cells that was involved in repair after injury. Dysregulated repair resulted in the persistence of K14+ cells in the airway epithelium in potentially premalignant lesions. The presence of K14+ progenitor airway epithelial cells in NSCLC predicted a poor prognosis, and this predictive value was strongest in smokers, in which it also correlated with metastasis. This suggests that reparative K14+ progenitor cells may be tumor-initiating cells in this subgroup of smokers with NSCLC. Cancer Res; 70(16); 6639–48. ©2010 AACR.