Respiratory diseases are among the leading causes of morbidity and mortality worldwide, representing a major unmet medical need. New chemical entities rarely make it into the clinic to treat respiratory diseases, which is partially due to a lack of adequate predictive disease models and the limited availability of human lung tissues to model respiratory disease. Human pluripotent stem cells (hPSCs) may help fill this gap by serving as a scalable human in vitro model. In addition, human in vitro models of rare genetic mutations can be generated using hPSCs. hPSC-derived epithelial cells and organoids have already shown great potential for the understanding of disease mechanisms, for finding new potential targets by using high-throughput screening platforms, and for personalised treatments. These potentials can also be applied to other hPSC-derived lung cell types in the future. In this review, we will discuss how hPSCs have brought, and may continue to bring, major changes to the field of respiratory diseases by understanding the molecular mechanisms of the pathology and by finding efficient therapeutics.