Rationale Improving the early detection and chemoprevention of lung cancer are key to improving outcomes. The pathobiology of early squamous lung cancer is poorly understood. We have shown that amplification of SOX2 is an early and consistent event in the pathogenesis of this disease but its functional oncogenic potential remains uncertain. We tested the impact of deregulated SOX2 expression in a novel organotypic system that recreates the molecular and microenvironmental context in which squamous carcinogenesis occurs. Objectives 1) To develop an in vitro model of bronchial dysplasia that recapitulates key molecular and phenotypic characteristics of the human disease 2) To test the hypothesis that SOX2 deregulation is a key early event in the pathogenesis of bronchial dysplasia 3) To use the model for studies on pathogenesis and chemoprevention Methods We engineer the inducible activation of oncogenes in immortalised bronchial epithelial cells. We use 3-dimensional tissue culture to build an organotypic model of bronchial dysplasia. Measurements and Main Results We recapitulate human bronchial dysplasia in vitro. SOX2 deregulation drives dysplasia, and loss of TP53 is a co-operating genetic event that potentiates the dysplastic phenotype. Deregulated SOX2 alters critical genes implicated in hallmarks of cancer progression. Targeted inhibition of AKT prevents the initiation of the dysplastic phenotype. Conclusion In the appropriate genetic and microenvironmental context acute deregulation of SOX2 drives bronchial dysplasia. This confirms it’s oncogenic potential in human cells and affords novel insights into the impact of SOX2 deregulation. This model can be used to test therapeutic agents aimed at chemoprevention.