The role of pleiotrophin in fetal lung development was investigated. We found that pleiotrophin and its receptor, proteintyrosine phosphatase receptor /, were highly expressed in mesenchymal and epithelial cells of the fetal lungs, respectively. Using isolated fetal alveolar epithelial type II cells, we demonstrated that pleiotrophin promoted fetal type II cell proliferation and arrested type II cell trans-differentiation into alveolar epithelial type I cells. Pleiotrophin also increased wound healing of injured type II cell monolayer. Knockdown of pleiotrophin influenced lung branching morphogenesis in a fetal lung organ culture model. Pleiotrophin increased the tyrosine phosphorylation of -catenin, promoted -catenin translocation into the nucleus, and activated T cell factor/lymphoid enhancer factor transcription factors. Dlk1, a membrane ligand that initiates the Notch signaling pathway, was identified as a downstream target of the pleiotrophin/-catenin pathway by endogenous dlk1 expression, promoter assay, and chromatin immunoprecipitation. These results provide evidence that pleiotrophin regulates fetal type II cell proliferation and differentiation via integration of multiple signaling pathways including pleiotrophin, -catenin, and Notch pathways.Fetal lung development is a complex biological process. Rat lung originates from the foregut endoderm as a bifurcation at embryonic day 10 (E10) and undergoes several generations of dichotomous branching morphogenesis to form a respiratory tree thereafter (1). The columnar epithelial cells differentiate into Clara cells and epithelial cells. Although surfactant protein C is detected as early as E13, fetal alveolar epithelial type II cells (fAEC II) 3 are not fully differentiated until E18 when glycogen pool-enriched cells become cuboidal and differentiate into cells containing lamellar bodies. fAEC II can further differentiate and give rise to the alveolar epithelial type I cells (AEC I).The regulation of fetal lung development includes coordinated regulation of molecular pathways as well as reciprocal interactions among mesenchymal cells, epithelial cells, and the extracellular matrix (2). Precise signals from mesenchymal cells regulate lung branching morphogenesis and lead to cell fate determination and the subsequent generation of cell type diversity in the lung epithelium. For example, mesenchymal cells secrete fibroblast growth factor 10 (3, 4). Fibroblast growth factor 10 in turn binds to its receptor, which is located on the surface of epithelial cells. The binding transduces a message to downstream signaling to regulate cell proliferation, differentiation, migration, and branching morphogenesis. Similarly, the epithelial cells also secrete signal molecules to interact with the mesenchyme. Sonic hedgehog (Shh) is growth factor expressed in the developing epithelium. Its receptor, Patched-1 (Ptc), is located on mesenchymal cells. The interaction between Shh and Ptc has been shown to be required for lung bud formation (5). Other growth factors such as pl...