SummaryDuring development, quiescent basal stem cells are derived from proliferative primordial progenitors through the cell cycle slowdown. In contrast, quiescent basal cells contribute to tissue repair during adult tissue regeneration by shifting from slow-cycling to proliferating and subsequently back to slow-cycling. Although sustained basal cell proliferation results in tumorigenesis, the molecular mechanisms regulating these transitions remain unknown. Using temporal single-cell transcriptomics of developing murine airway progenitors andin vivogenetic validation experiments, we found that Tgfß signaling slowed down cell cycle by inhibitingId2expression in airway progenitors and contributed to the specification of slow-cycling basal cell population during development. In adult tissue regeneration, reduced Tgfß signaling restoredId2expression and initiated epithelial regeneration.Id2overexpression andTgfbr2knockout enhanced epithelial proliferation; however, persistentId2expression in basal cells drove hyperplasia at a rate that resembled a precancerous state. Together, the Tgfß-Id2 axis commonly regulates the proliferation transitions in airway basal cells during development and regeneration, and its fine-tuning is critical for normal regeneration while avoiding basal cell hyperplasia.