Alveolar epithelial regeneration is essential for recovery from devastating lung diseases. This process occurs when type II alveolar pneumocytes (AT2 cells) proliferate and transdifferentiate into type I alveolar pneumocytes (AT1 cells). We used genome-wide analysis of chromatin accessibility and gene expression following acute lung injury to elucidate repair mechanisms. AT2 chromatin accessibility changed substantially following injury to reveal STAT3 binding motifs adjacent to genes that regulate essential regenerative pathways. Single-cell transcriptome analysis identified brain-derived neurotrophic factor (Bdnf) as a STAT3 target gene with newly accessible chromatin in a unique population of regenerating AT2 cells. Furthermore, the BDNF receptor tropomyosin receptor kinase B (TrkB) was enriched on mesenchymal alveolar niche cells (MANCs). Loss or blockade of AT2-specific Stat3, Bdnf or mesenchyme-specific TrkB compromised repair and reduced Fgf7 expression by niche cells. A TrkB agonist improved outcomes in vivo following lung injury. These data highlight the biological and therapeutic importance of the STAT3–BDNF–TrkB axis in orchestrating alveolar epithelial regeneration.