Updated project metadata. Fibrotic interstitial lung disease (ILD) are lung disorders characterized by the accumulation of extracellular matrix, ultimately resulting in the destruction of the pulmonary scaffold. Continuous pro-fibrotic signaling perpetuates the remodeling process, specifically targeting the epithelial cell compartment, thereby destroying the gas exchange area. Studies that address this detrimental crosstalk between lung epithelial cells and fibroblasts are key to understanding ILD. With the aim of identifying functionally relevant targets that drive mesenchymal-epithelial crosstalk and their potential as new avenues to therapeutic strategies, we developed an organoid co-culture system based on human induced pluripotent stem cell-derived alveolar epithelial type 2 cells and lung fibroblasts from ILD patients as well as IMR-90 controls. While organoid formation capacity and organoid size was comparable in the presence of ILD or control lung fibroblasts, metabolic activity was significantly increased in ILD co-cultures. Alveolar organoids cultured with ILD fibroblasts further demonstrated reduced stem cell function supported by reduced Surfactant Protein C gene expression together with an aberrant basaloid-prone differentiation program indicated by elevated Cadherin 2, Bone Morphogenic Protein 4 and Vimentin transcription. In order to identify key mediators of the misguided mesenchymal-to-epithelial crosstalk with a focus on disease-relevant inflammatory processes, we used secretome mass spectrometry to identify key signals secreted by end stage ILD lung fibroblasts. Over 2000 proteins were detected in a single-shot experiment with 47 differentially upregulated proteins when comparing ILD and non-chronic lung disease control fibroblasts. The secretome profile was dominated by chemokines of the C-X-C motif family, including CXCL1, -3, and -8, all interfering with (epithelial) growth factor signaling orchestrated by Interleukin 11 (IL11), steering fibrogenic cell-cell communication, and proteins regulating extracellular matrix remodeling including epithelial-to-mesenchymal transition. When in turn treating 3D monocultures of iAT2s with IL11 we recapitulated the co-culture results obtained with primary ILD fibroblasts including changes in metabolic activity as well as organoid formation capacity and size. In summary, our analysis identified mesenchyme-derived mediators likely contributing to the disease-perpetuating mesenchymal-to-epithelial crosstalk in ILD by using sophisticated alveolar organoid co-cultures indicating the importance of cytokine-driven aberrant epithelial differentiation and confirmed IL11 as a key player in ILD using an unbiased approach.