Induced pluripotent stem cells (iPSCs) are a recently developed technology in which fully differentiated cells such as fibroblasts from individual CF patients can be repaired with [wildtype] CFTR, and reprogrammed to differentiate into fully differentiated cells characteristic of the proximal and distal airways. Here, we review properties of different epithelial cells in the airway, and the in vitro genetic roadmap which iPSCs follow as they are step‐wise differentiated into either basal stem cells, for the proximal airway, or into Type II Alveolar cells for the distal airways. The central theme is that iPSC‐derived basal stem cells, are penultimately dependent on NOTCH signaling for differentiation into club cells, goblet cells, ciliated cells, and neuroendocrine cells. Furthermore, given the proper matrix, these cellular progenies are also able to self‐assemble into a fully functional pseudostratified squamous proximal airway epithelium. By contrast, club cells are reserve stem cells which are able to either differentiate into goblet or ciliated cells, but also to de‐differentiate into basal stem cells. Variant club cells, located at the transition between airway and alveoli, may also be responsible for differentiation into Type II Alveolar cells, which then differentiate into Type I Alveolar cells for gas exchange in the distal airway. Using gene editing, the mutant CFTR gene in iPSCs from CF patients can be repaired, and fully functional epithelial cells can thus be generated through directed differentiation. However, there is a limitation in that the lung has other CFTR‐dependent cells besides epithelial cells. Another limitation is that there are CFTR‐dependent cells in other organs which would continue to contribute to CF disease. Furthermore, there are also bystander or modifier genes which affect disease outcome, not only in the lung, but specifically in other CF‐affected organs. Finally, we discuss future personalized applications of the iPSC technology, many of which have already survived the “proof‐of‐principle” test. These include (i) patient‐derived iPSCs used as a “lung‐on‐a‐chip” tool for personalized drug discovery; (ii) replacement of mutant lung cells by wildtype lung cells in the living lung; and (iii) development of bio‐artificial lungs. It is hoped that this review will give the reader a roadmap through the most complicated of the obstacles, and foster a guardedly optimistic view of how some of the remaining obstacles might one day be overcome.