Abstract Long COVID or Post-acute sequalae of COVID-19 (PASC) defines the persistent signs, symptoms, and conditions long after initial SARS-CoV-2 infection which affecting over 10% of COVID-19 patients, with 40% of them affecting respiratory system. The lung histopathological changes and underlying mechanism remain elusive. Here we systemically investigate histopathological and transcriptional changes at 7, 14, 42, 84 and 120 days-post-SARS-CoV-2-infection (dpi) in hamster. We demonstrate persistent viral residues, chronic inflammatory and fibrotic changes from 42dpi to 120dpi. The most prominent lung histopathological lesion is multifocal alveolar-bronchiolization observed in every animal from 14dpi until 120dpi. However, none of the above are observed in hamsters recovered from influenza A infection. We show airway progenitor CK14+ basal cells actively proliferate, differentiate into SCGB1A+ club cell or Tubulin+ ciliated cells, leading to alveolar-bronchiolization. Most importantly, Notch pathway is persistently upregulated. Intensive Notch3 and Hes1 protein expression are detected in alveolar-bronchiolization foci, suggesting the association of sustained Notch signaling with dysregulated lung regeneration. Lung spatial transcriptomics show upregulation of genes positively regulating Notch signaling is spatially overlapping with alveolar-bronchiolization region. To be noted, significant upregulation of tumor-related genes was detected in abnormal bronchiolization region by spatial transcriptomics analysis, indicating possible risk of lung carcinoma. Collectively, our data suggests SARS-CoV-2 infection caused chronic inflammatory and fibrotic tissue damages in hamster lung, sustained upregulation of Notch pathway signaling contributed to the dysregulated lung regeneration and CK14+ basal cells-driven alveolar-bronchiolization. The study provides important information for potential therapeutic approaches and probable long-term surveillance of malignancy in PASC management.