Objectives: BPD is a major cause of neonatal and infant morbidity and mortality. While cellular therapy using autologous stem cells for BPD has been previously postulated, the reparative and anti-inflammatory actions of stem cells from the preterm amnion have not been evaluated. In this study, compared the differentiation potential and efficacy of term versus preterm amnion epithelial cells (PThAECs) to protect against inflammation and fibrosis induced by bleomycin in immunocompetent adult mice. Study design: We cultured PThAEC in small airway growth media for 28 days and measured changes to gene expression of surfactant proteins. We also induced lung inflammation in adult C57Bl6 mice using a single intra-nasal bolus of bleomycin. 4x106 term hAEC, preterm hAEC or saline was administered via intraperitoneal injection, 24 hours later. Results: Preterm hAEC (PThAEC) did not differentiate down the lung lineage following 28-day culture in small airway growth media (SAGM), as we had previously reported in term hAEC. We also observed markedly diminished protective effects exerted by the (PThAECs) compared to term hAEC, where administration of PThAEC did not improve Ashcroft scoring, nor collagen deposition in the lung as assessed by Sirius Red staining despite a reduction in activated myofibroblasts.Conclusion: Given these findings, we believe that autologous stem cell therapy in preterm babies is likely to be of limited efficacy. Indeed, in addition to stem cells from fetal membranes, stem cells from other tissues of pretermbabies should be more closely evaluated before moving forward towards clinical use.