by Bo Ram Kim, Emily Van de Laar, Michael Cabanero, Shintaro Tarumi, Stefan Hasenoeder, Dennis Wang, Carl Virtanen, Takaya Suzuki, Bizhan Bandarchi, Shingo Sakashita, Nhu An Pham, Sharon Lee, Shaf Keshavjee, Thomas K. Waddell, Ming-Sound Tsao, Nadeem Moghal Although cancers are considered stem cell diseases, mechanisms involving stem cell alterations are poorly understood. Squamous cell carcinoma (SQCC) is the second most common lung cancer, and its pathogenesis appears to hinge on changes in the stem cell behavior of basal cells in the bronchial airways. Basal cells are normally quiescent and differentiate into mucociliary epithelia. Smoking triggers a hyperproliferative response resulting in progressive premalignant epithelial changes ranging from squamous metaplasia to dysplasia. These changes can regress naturally, even with chronic smoking. However, for unknown reasons, dysplasias have higher progression rates than earlier stages. We used primary human tracheobronchial basal cells to investigate how copy number gains in SOX2 and PIK3CA at 3q26-28, which co-occur in dysplasia and are observed in 94% of SQCCs, may promote progression. We find that SOX2 cooperates with PI3K signaling, which is activated by smoking, to initiate the squamous injury response in basal cells. This response involves SOX9 repression, and, accordingly, SOX2 and PI3K signaling levels are high during dysplasia, while SOX9 is not expressed. By contrast, during regeneration of mucociliary epithelia, PI3K signaling is low and basal cells transiently enter a SOX2 Lo SOX9 Hi state, with SOX9 promoting proliferation and preventing squamous differentiation. Transient reduction in SOX2 is necessary for ciliogenesis, although SOX2 expression later rises and drives mucinous differentiation, as SOX9 levels decline. Frequent coamplification of SOX2 and PIK3CA in dysplasia may, thus, promote progression by locking basal cells in a SOX2 Hi SOX9 Lo state with active PI3K signaling, which sustains the squamous injury response while precluding normal mucociliary differentiation. Surprisingly, we find that, although later in invasive carcinoma SOX9 is generally expressed at low levels, its expression is higher in a subset of SQCCs with less squamous identity and worse clinical outcome. We propose that early pathogenesis of most SQCCs involves stabilization of the squamous injury state in stem cells through copy number gains at 3q, with the pro-proliferative activity of SOX9 possibly being exploited in a subset of SQCCs in later stages.