The lung epithelia facilitate wound closure by secretion of various cytokines and growth factors. Nerve growth factor (NGF) has been well described in airway inflammation; however, its likely role in lung repair has not been examined thus far. To investigate the repair function of NGF, experiments were performed in vitro using cultured alveolar epithelial cells and in vivo using a naphthalene-induced model of Clara epithelial cell injury. Both in vitro and in vivo experiments revealed airway epithelial cell proliferation following injury to be dependent on NGF and the expression of its receptor, tropomyosin-receptor-kinase A. Additionally, NGF also augmented in vitro migration of alveolar type II cells. In vivo, transgenic mice over-expressing NGF in Clara cells (NGFtg) did not reveal any proliferation or alteration in Clara cell phenotype. However, following Clara cell specific injury, proliferation was increased in NGFtg and impaired upon inhibition of NGF. Furthermore, NGF also promoted the expression of collagen I and fibronectin in vitro and in vivo during repair, where significantly higher levels were measured in re-epithelialising NGFtg mice. Our study demonstrates that NGF promotes the proliferation of lung epithelium in vitro and the renewal of Clara cells following lung injury in vivo.