Background: CCAAT/enhancer‐binding protein (C/EBP)α is crucial for lung development and differentiation of the pulmonary epithelium. Conversely, no lung defects have been observed in C/EBPβ‐deficient mice, although C/EBPβ trans‐activate pulmonary genes by binding to virtually identical DNA‐sequences as C/EBPα. Thus, the pulmonary phenotype of mice lacking C/EBPβ could be explained by functional replacement with C/EBPα. We investigated whether C/EBPα and C/EBPβ have overlapping functions in regulating lung epithelial differentiation during organogenesis. Epithelial differentiation was assessed in mice with a lung epithelial–specific (SFTPC‐Cre‐mediated) deletion of C/EBPα (CebpaΔLE), C/EBPβ (CebpbΔLE), or both genes (CebpaΔLE; CebpbΔLE). Results: Both CebpaΔLE mice and CebpaΔLE; CebpbΔLE mice demonstrated severe pulmonary immaturity compared to wild‐type littermates, while no differences in lung histology or epithelial differentiation were observed in CebpbΔLE mice. In contrast to CebpaΔLE mice, CebpaΔLE; CebpbΔLE mice also displayed undifferentiated Clara cells with markedly impaired protein and mRNA expression of Clara cell secretory protein (SCGB1A1), compared to wild‐type littermates. In addition, ectopic mucus‐producing cells were observed in the conducting airways of CebpaΔLE; CebpbΔLE mice. Conclusions: Our findings demonstrate that C/EBPα and C/EBPβ play pivotal, and partly overlapping roles in determining airway epithelial differentiation, with possible implications for tissue regeneration in lung homeostasis and disease. Developmental Dynamics 241:911–923, 2012. © 2012 Wiley Periodicals, Inc.