Lung injury and fibrosis represent the most significant outcomes of severe and acute lung disorders,including COVID-19.However,there are still no effective drugs to treat lung injury and fibrosis.In this study,we report the generation of clinical-grade human embryonic stem cells (hESCs)-derived immunity-and matrix-regulatory cells (IMRCs) produced under good manufacturing practice requirements,that can treat lung injury and fibrosis in vivo.We generate IMRCs by sequentially differentiating hESCs with serum-free reagents.IMRCs possess a unique gene expression profile distinct from that of umbilical cord mesenchymal stem cells (UCMSCs),such as higher expression levels of proliferative,immunomodulatory and anti-fibrotic genes.Moreover,intravenous delivery of IMRCs inhibits both pulmonary inflammation and fibrosis in mouse models of lung injury,and significantly improves the survival rate of the recipient mice in a dose-dependent manner,likely through paracrine regulatory mechanisms.IMRCs are superior to both primary UCMSCs and the FDA-approved drug pirfenidone,with an excellent efficacy and safety profile in mice and monkeys.In light of public health crises involving pneumonia,acute lung injury and acute respiratory distress syndrome,our findings suggest that IMRCs are ready for clinical trials on lung disorders.