ABSTRACT Limited resection has recently emerged as a standard procedure for small peripheral squamous cell carcinoma (SqCC) of the lung, emphasizing the need for accurate prognostic prediction. We retrospectively analyzed 53 peripheral SqCCs at pathological stage IA. Hematoxylin and eosin (H&E)–stained and immunohistochemically stained sections for TTF‐1 and p40 were reviewed to assess peripheral tumor growth patterns and intra‐tumoral alveolar remnants. Three peripheral growth patterns were identified: alveolar filling peripheral growth (AFPG) in 32.1%, lepidic‐like peripheral growth (LpPG) in 26.4%, and destructive invasive peripheral growth (DIPG) in 52.8%. Intra‐tumoral alveolar remnants, defined as consecutive TTF‐1–positive non‐neoplastic alveolar cells, were classified as expanded alveolar remnants (EAR) in 81.1%, collapsed alveolar remnants (CAR) in 71.7%, or no alveolar remnants (NAR) in 17.0%. Logistic regression analysis demonstrated significant associations: AFPG with EAR and LpPG with CAR. The frequency of NAR in the recurrence group was significantly higher than in the non‐recurrence group. Kaplan–Meier analysis showed that NAR was associated with significantly worse overall survival compared with EAR or CAR. These findings indicate that peripheral growth patterns reflect intra‐tumoral alveolar remnants and that absence of alveolar remnants is a strong negative prognostic factor in small peripheral SqCCs at stage IA.