Lung branching morphogenesis is a highly orchestrated process that gives rise to the complex network of gas-exchanging units in the adult lung. Intricate regulation of signaling pathways, transcription factors, and epithelial-mesenchymal cross-talk are critical to ensuring branching morphogenesis occurs properly. Here, we describe a role for the transcription factor Sox9 during lung branching morphogenesis. Sox9 is expressed at the distal tips of the branching epithelium in a highly dynamic manner as branching occurs and is down-regulated starting at embryonic day 16.5, concurrent with the onset of terminal differentiation of type 1 and type 2 alveolar cells. Using epithelial-specific genetic loss-and gain-of-function approaches, our results demonstrate that Sox9 controls multiple aspects of lung branching. Fine regulation of Sox9 levels is required to balance proliferation and differentiation of epithelial tip progenitor cells, and loss of Sox9 leads to direct and indirect cellular defects including extracellular matrix defects, cytoskeletal disorganization, and aberrant epithelial movement. Our evidence shows that unlike other endoderm-derived epithelial tissues, such as the intestine, Wnt/β-catenin signaling does not regulate Sox9 expression in the lung. We conclude that Sox9 collectively promotes proper branching morphogenesis by controlling the balance between proliferation and differentiation and regulating the extracellular matrix.organogenesis | campomelic dysplasia