Receptors for advanced glycation end‐products (RAGE) are multi‐ligand cell surface receptors of the immunoglobin superfamily prominently expressed by lung epithelium. Previous experiments demonstrate that over‐expression of RAGE by murine alveolar epithelium throughout embryonic development causes neonatal lethality coincident with significant lung hypoplasia. In the current study, we evaluated the expression of TTF‐1, a homeodomain‐containing transcription factor critical for branching morphogeneis, in mice that differentially expressed RAGE. We also contexualized TTF‐1 expression with the abundance of FoxA2, a winged double helix DNA binding protein that influences respiratory epithelial cell differentiation, and surfactant proteins. Conditional RAGE over‐expression was induced in mice throughout gestation (embryonic day (E)0‐18.5) as well as during the critical saccular period (E15.5‐18.5) of development and analyses were conducted on E18.5 lung tissue. Histology revealed marked loss of lung tissue beginning in the canalicular stage of lung development and continuing throughout the saccular period. We discovered consistently decreased expression for both TTF‐1 and FoxA2 in lungs from TG mice compared to age‐matched controls. We also clarified diminished surfactant protein abundance in TG mice, suggesting possible hindered differentiation and/or proliferation of alveolar epithelial cells under the genetic control of these two critical transcription factors. These results demonstrate that RAGE must be specifically regulated during lung formation and that perturbation of epithelial cell differentiation culminating in respiratory distress and perinatal lethality may coincide with elevated RAGE expression in the lung parenchyma.