Alveoli are complex microenvironments composed of various cell types, including epithelial, fibroblast, endothelial, and immune cells, which work together to maintain a delicate balance in the lung environment, ensuring proper growth, development, and an effective response to lung injuries. However, prolonged inflammation or aging can disrupt normal interactions between these cells, leading to impaired repair processes and a substantial decline in lung function. Therefore, it is essential to understand the key mechanisms underlying the interactions between the major cell types within the alveolar microenvironment. We explored the key mechanisms underlying the interactions among the major cell types within the alveolar microenvironment. These interactions occur through the secretion of signaling factors and play crucial roles in the response to injury, repair mechanisms, and development of fibrosis in the lungs. Specifically, we focused on the regulation of alveolar type 2 cells by fibroblasts, endothelial cells, and macrophages. Additionally, we explored the diverse phenotypes of fibroblasts at different stages of life and in response to lung injury, highlighting their impact on matrix production and immune functions. Furthermore, we summarize the various phenotypes of macrophages in lung injury and fibrosis as well as their intricate interplay with other cell types. This interplay can either contribute to the restoration of immune homeostasis in the alveoli or impede the repair process. Through a comprehensive exploration of these cell interactions, we aimed to reveal new insights into the molecular mechanisms that drive lung injury towards fibrosis and identify potential targets for therapeutic intervention.