Idiopathic pulmonary fibrosis (IPF) is a progressive and irreversible pulmonary interstitial disease that seriously affects the patient's quality of life and lifespan. The pathogenesis of IPF has not been clarified, and its treatment is limited to pirfenidone and nintedanib, which only delays the decline of lung function. Alveolar epithelial type 2 (AT2) cells are indispensable in the regeneration and lung surfactant secretion of alveolar epithelial cells. Studies have shown that AT2 cell dysfunction initiates the occurrence and progression of IPF. This review expounds on the AT2 cell dysfunction in IPF, involving senescence, apoptosis, endoplasmic reticulum stress, mitochondrial damage, metabolic reprogramming, and the transitional state of AT2 cells. This article also briefly summarizes potential treatments targeting AT2 cell dysfunction.© 2022. The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature.