We established a dual reporter (SFTPC:GFP AGER:mCherry-HiBiT) human iPSC line and the "On-Gel" spheroid culture system suitable for finding the essential signals for alveolar type 2 (AT2) to type 1 (AT1) cell conversion comprehensively. After compound screening, we found that LATS-IN-1 and BAY1125976 synergistically promoted AT1 marker gene expression. Overall design: Alveolar epithelial spheroids in "On-Gel" culture were treated with DMSO, LATS-IN-1, BAY1125976, and both of them to investigate the transcriptomes of each condition to find the mechanism of the differentiation from AT2 to AT1 cells.