Lung development requires a complex series of developmentally controlled interactions that involve mechanical forces, genetic and endocrine influences, and cell-cell communication. At each step, cell-matrix or cell-cell signaling mediated by peptide growth factors and extracellular matrix components is crucial in directing cell proliferation, differentiation, and migration. Although a comprehensive understanding of how these components interact to guide lung organogenesis has been elusive, the action and control of peptide growth factors in autocrine and paracrine signaling, mesenchymal-epithelial interactions in controlling branching morphogenesis, cell-cell communication in the regulation of cellular differentiation, and factors regulating pattern formation are being clarified.