Stem cells, including the resident lung mesenchymal stem cells (LMSCs), are critically important for injury repair. Compelling evidence links perinatal vitamin D (VD) deficiency to reactive airway disease; however, the effects of perinatal VD deficiency on LMSC function is unknown. We tested the hypothesis that perinatal VD deficiency alters LMSC proliferation, differentiation, and function, leading to an enhanced myogenic phenotype. We also determined whether LMSCs' effects on alveolar type II (ATII) cell function are paracrine. Using an established rat model of perinatal VD deficiency, we studied the effects of four dietary regimens (0, 250, 500, or 1,000 IU/kg cholecalciferol-supplemented groups). At Postnatal Day 21, LMSCs were isolated, and cell proliferation and differentiation (under basal and adipogenic induction conditions) were determined. LMSC paracrine effects on ATII cell proliferation and differentiation were determined by culturing ATII cells in LMSC-conditioned media from different experimental groups. Using flow cytometry, >95% of cells were CD45-ve, >90% were CD90 + ve, >58% were CD105 + ve, and >64% were Stro-1 + ve, indicating their stem cell phenotype. Compared with the VD-supplemented groups, LMSCs from the VD-deficient group demonstrated suppressed PPARγ, but enhanced Wnt signaling, under basal and adipogenic induction conditions. LMSCs from 250 VD- and 500 VD-supplemented groups effectively blocked the effects of perinatal VD deficiency. LMSC-conditioned media from the VD-deficient group inhibited ATII cell proliferation and differentiation compared with those from the 250 VD- and 500 VD-supplemented groups. These data support the concept that perinatal VD deficiency alters LMSC proliferation and differentiation, potentially contributing to increased respiratory morbidity seen in children born to mothers with VD deficiency.