There is growing evidence for the role of CFTR (cystic fibrosis transmembrane conductance regulator) in lung development and differentiation. The mechanism by which the chloride channel could affect lung organogenesis, however, is unknown. In utero CFTR gene transfer in the fetal lungs of mice, rats, and non-human primates was shown previously to alter lung structure and function. A study of the genes altered in the fetal rat lung following CFTR overexpression was initiated in an effort to determine the molecular mechanism for CFTR-dependent differentiation. In utero gene transfer with recombinant adenoviruses carrying either a reporter gene or CFTR resulted in the increased expression of a number of genes upon microarray analysis. The majority of the genes overexpressed in the CFTR-treated lungs were primarily associated with muscle structure and function. Histological and biochemical characterization of these proteins including myosin heavy chain, heat shock protein 27, and isoforms of myosin light chain showed that CFTR overexpression had a profound effect on smooth muscle contraction-related proteins. The CFTR-dependent regulation of smooth muscle contraction related proteins was shown to be related to chloride and extracellular ATP and was dependent upon the PI3 Kinase and Phospholipase C pathways. The changes in smooth muscle proteins were consistent with CFTR-dependent contractions of the embryonic airway smooth muscle. An assay was developed using fluorescent polystyrene beads to show that CFTR did indeed increase amniotic fluid flow into the fetal lung. Increased amniotic fluid pressure was shown previously to be associated with stretch-induced differentiation of the lung. Evaluation of neonatal respiratory function showed that CFTR-dependent muscle contractions and increased amniotic fluid pressure resulted in accelerated maturation of the neonatal rat lung. In addition, these CFTR-dependent changes were shown to be sufficient to reverse the lung phenotype of the CFTR knockout mouse. Mechanical forces influence lung development through pulmonary distension. CFTR overexpression in the fetal lung altered differentiation and development in the lung. These results are consistent with CFTR influencing lung development by regulating the muscle contractions associated with cytoskeletal tension and stretch induced differentiation. Deficiency of CFTR altering lung development would contribute significantly to the Cystic Fibrosis disease phenotype.