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Although breathing dynamics and mechanical strain play critical roles in alveolar biology, their contributions to the pathogenesis of respiratory diseases are often overlooked. To address this gap, we developed an organoid model in which alveolar epithelial-fibroblast organoids are subjected to controlled mechanical strain using a cell-stretching bioreactor. This platform replicates the spatial organization and multicellular complexity of alveolar tissue and enables investigation of how cell-cell communication and mechanotransduction influence tissue structure and function in health and disease. In this protocol, we describe methods for generating and culturing epithelial-fibroblast organoids using A549 alveolar epithelial and MRC-5 lung fibroblast cell lines in a basement membrane extracellular matrix hydrogel. Organoids are then non-enzymatically isolated and embedded in 3D collagen gels in specialized plates in the bioreactor. We outline procedures for applying equibiaxial strain to mimic pathological breathing patterns seen in respiratory exacerbations. Finally, we present a standard characterization workflow, including immunostaining for cell-specific markers and immunoassays to profile immune mediator release. Together, these analyses support the assessment of organoid structure and function. This protocol provides a user-friendly, reproducible, and adaptable platform for studying alveolar biology under mechanical stress, with easily modifiable parameters to meet diverse experimental goals and advance research into lung disease mechanisms.