The lung contains multiple progenitor cell types, but how their responses are choreographed during injury repair and whether this changes with age is poorly understood. We report that histone H3 lysine 9 di-methylation (H3K9me2), mediated by the methyltransferase G9a, regulates the dynamics of distal lung epithelial progenitor cells and that this regulation deteriorates with age. In aged mouse lungs, H3K9me2 loss coincided with fewer alveolar type 2 (AT2) cell progenitors and reduced alveolar regeneration but increased the frequency and activity of multipotent bronchioalveolar stem cells (BASCs) and bronchiolar progenitor club cells. H3K9me2 depletion in young mice decreased AT2 progenitor activity and impaired alveolar injury repair. Conversely, H3K9me2 depletion increased chromatin accessibility of bronchiolar cell genes, increased BASC frequency, and accelerated bronchiolar cell injury repair. These findings indicate that during aging, the epigenetic regulation that coordinates lung progenitor cells’ regenerative responses becomes dysregulated, aiding our understanding of age-related susceptibility to lung disease.