Background: Stem cell transplantation is a promising method for the treatment of chronic obstructive pulmonary disease (COPD), and mesenchymal stem cells (MSCs) have clinical potential for lung repair/ regeneration. However, the rates of engraftment and differentiation are generally low following MSC therapy for lung injury. In previous studies, we constructed a pulmonary surfactant-associated protein A (SPA) suicide gene system, rAAV-SPA-TK, which induced apoptosis in alveolar epithelial type II (AT II) cells and vacated the AT II cell niche. We hypothesized that this system would increase the rates of MSC engraftment and repair in COPD rats. Methods: The MSC engraftment rate and morphometric changes in lung tissue in vivo were investigated by in situ hybridization, hematoxylin and eosin staining, Masson's trichrome staining, immunohistochemistry, and real-time PCR. The expression of hypoxia inducible factor (HIF-1 alpha) and stromal cell-derived factor-1 (SDF-1), and relationship between HIF-1 alpha and SDF-1 in a hypoxic cell model were analyzed by real-time PCR, western blotting, and enzyme-linked immunosorbent assay. Results: rAAV-SPA-TK transfection increased the recruitment of MSCs but induced pulmonary fibrosis in COPD rats. HIF-1 alpha and SDF-1 expression were enhanced after rAAV-SPA-TK transfection. Hypoxia increased the expression of HIF-1 alpha and SDF-1 in the hypoxic cell model, and SDF-1 expression was augmented by HIF-1 alpha under hypoxic conditions. Conclusions: Vacant AT II cell niches increase the homing and recruitment of MSCs to the lung in COPD rats. MSCs play an important role in lung repair and promote collagen fiber deposition after induction of secondary damage in AT II cells by rAAV-SPA-TK, which involves HIF-1 alpha and SDF-1 signaling.