The basic helix-loop-helix protein achaete-scute homolog-1 (ASH1) is involved in lung neuroendocrine (NE) differentiation and tumor promotion in SV40 transgenic mice. Constitutive expression of human ASH-1 (hASH1) in mouse lung results in hyperplasia and remodeling that mimics bronchiolization of alveoli (BOA), a potentially premalignant lesion of human lung carcinomas. We now show that this is due to sustained cellular proliferation in terminal bronchioles and resistance to apoptosis. Throughout the airway epithelium the expression of anti-apoptotic Bcl-2 and c-Myb was increased and Akt/mTOR pathway activated. Moreover, the expression of matrix metalloproteases (MMPs) including MMP7 was specifically enhanced at the bronchiolo-alveolar duct junction and BOA suggesting that MMPs play a key role in this microenvironment during remodeling. We also detected MMP7 in 70% of human BOA lesions. Knockdown of hASH1 gene in human lung cancer cells in vitro suppressed growth by increasing apoptosis. We also show that forced expression of hASH1 in immortalized human bronchial epithelial cells decreases apoptosis. We conclude that the impact of hASH1 is not limited to cells with NE phenotype. Rather, constitutive expression of hASH1 in lung epithelium promotes remodeling through multiple pathways that are commonly activated during lung carcinogenesis. The collective results suggest a novel model of BOA formation via hASH1-induced suppression of the apoptotic pathway. Our study yields a promising new preclinical tool for chemoprevention of peripheral lung carcinomas.