Healthy repair of the alveoli requires alveolar stem cells to differentiate into cells designed for gas exchange. In chronic lung fibrotic disease like idiopathic pulmonary fibrosis (IPF), alveolar epithelial cells regenerate abnormally. The cause of this is unknown but its highly cellular, inflamed and structurally altered regenerating niche is likely to be relevant. Here, in unique sets of human lung tissues capturing advancing fibrosis, and with a 33-plex single cell imaging mass cytometry (IMC), we provide a high resolution and comprehensive temporo-spatial cell atlas of the regenerating alveolar niches. Using a suite of mathematical tools, we expose an organized immune network and identify CD206 hi alveolar macrophages as a central immune cell in the immune-alveolar epithelial interactome. A spatially-directed receptor-ligand analysis offers an in-silico mechanism by which these macrophages influenced alveolar regeneration. Our study unravels a complex cellular environment and identifies key interactions that influence alveolar regeneration in a fibrotic lung.