Bronchioloalveolar stem cells located at the bronchiolar/alveolar junction may be involved in embryogenesis or regeneration. These cells have not yet been described in large animals, and they may enable the development of new therapeutics to treat acute or chronic lung disease. In this study, we aimed to establish the presence of bronchioloalveolar stem cells in ovine lungs and to characterize their stemness properties. Lung cells were studied using immunohistochemistry on frozen sections of the lung, and immunocytochemistry and flow cytometry were conducted on derived cells. The stem cells were identified by co-expression of CCSP, SP-C and the CD34 hematopoietic stem-cell marker. A minor population of CD34pos/SP-Cpos/CCSPpos cells (0.33% ± 0.31) was present ex vivo in cell suspensions from dissociated lungs. Using CD34 magnetic positive cell sorting, undifferentiated SP-Cpos/CCSPpos cells were purified (>80%) and maintained in culture. Using synthetic media and various extracellular matrixes, SP-Cpos/CCSPpos cells differentiated into either Clara cells or alveolar epithelial type-II cells. Furthermore, bronchioloalveolar stem cells obtained ex vivo and in vitro expressed the stem cell-specific genes NANOG, OCT4 and BMI1. We report for the first time in a large animal the existence of bronchioloalveolar stem cells with dual differentiation potential and the expression of stem cell-specific genes.