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Lower airway club cells (CCs) serve the dual roles of a secretory cell and a stem cell. Here, we probe how the CC fate is regulated. We find that, in response to acute perturbation of Notch signaling, CCs adopt distinct fates. Although the vast majority transdifferentiate into multiciliated cells, a "variant" subpopulation (v-CCs), juxtaposed to neuroepithelial bodies (NEBs; 5%–10%) and located at bronchioalveolar duct junctions (>80%), does not. Instead, v-CCs transition into lineage-ambiguous states but can revert to a CC fate upon restoration of Notch signaling and repopulate the airways with CCs and multiciliated cells. The v-CC response to Notch inhibition is dependent on localized activation of β-catenin in v-CCs. We propose that the CC fate is stabilized by canonical Notch signaling, that airways are susceptible to perturbations to this pathway, and that NEBs/terminal bronchioles comprise niches that modulate CC plasticity via β-catenin activation to facilitate airway repair post Notch inhibition. [Display omitted] • Airway club cells are facultative stem cells maintained by canonical Notch signaling • Most club cells transdifferentiate into multiciliated cells upon acute Notch inhibition • NEBs and terminal bronchioles are niches for variant club cells (v-CCs) that have a different fate • v-CCs escape because of β-catenin activation and repair airways post Notch inhibition Lingamallu et al. demonstrate that club cells (CCs), facultative stem cells of the lower airways, are maintained by canonical Notch signaling. Most CCs, excluding a subpopulation at NEBs and terminal bronchioles (v-CCs), transdifferentiate into multiciliated cells upon Notch inhibition. v-CCs escape due to β-catenin activation and repair airways post Notch inhibition. [ABSTRACT FROM AUTHOR]