Severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), which causes coronavirus disease 2019 (COVID-19), may result in acute respiratory distress syndrome (ARDS), multi-organ failure and death. The alveolar epithelium is a major target of the virus, but representative models to study virus host interactions in more detail are currently lacking. Here, we describe a human 2D air-liquid interface culture system which was characterized by confocal-, electron-microscopy and single cell mRNA expression analysis. In this model, alveolar cells, but also basal cells and rare neuroendocrine cells, are grown from 3D self-renewing fetal lung bud tip organoids. These cultures were readily infected by SARS-CoV-2 with mainly surfactant protein C-positive alveolar type II-like cells being targeted. Consequently, significant viral titers were detected and mRNA expression analysis revealed induction of type I/III interferon response program. Treatment of these cultures with a low dose of interferon lambda 1 reduced viral replication. Hence, these cultures represent an experimental model for SARS-CoV-2 infection and can be applied for drug screens.