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Summary Lung epithelial lineages have been difficult to maintain in pure form in vitro, and lineage-specific reporters have proven invaluable for monitoring their emergence from cultured pluripotent stem cells (PSCs). However, reporter constructs for tracking proximal airway lineages generated from PSCs have not been previously available, limiting the characterization of these cells. Here, we engineer mouse and human PSC lines carrying airway secretory lineage reporters that facilitate the tracking, purification, and profiling of this lung subtype. Through bulk and single-cell-based global transcriptomic profiling, we find PSC-derived airway secretory cells are susceptible to phenotypic plasticity exemplified by the tendency to co-express both a proximal airway secretory program as well as an alveolar type 2 cell program, which can be minimized by inhibiting endogenous Wnt signaling. Our results provide global profiles of engineered lung cell fates, a guide for improving their directed differentiation, and a human model of the developing airway., Graphical Abstract, Highlights • Reporter lines allow detailed profiling of pluripotent stem cell-derived airway • PSC-derived airway spheres contain basal and secretory cells as well as non-lung • Single-cell RNA-seq reveals heterogeneity and potential plasticity, In this article, Kotton and colleagues show that human pluripotent stem cell-derived airway epithelial spheres contain basal and secretory airway cells. Using reporter lines for the secretory airway lineage alongside transcriptomic and functional analyses, they demonstrate that these cells have characteristic features of this population but are susceptible to Wnt-dependent phenotypic drift toward an alveolar type II cell-like program.