Tumor suppressor phosphatase and tensin homolog deleted on chromosome 10 (PTEN) is a lipid phosphatase that regulates multiple cellular processes including cell polarity, migration, proliferation, and carcinogenesis. In this work, we demonstrate that conditional deletion of Pten (Pten D/D ) in the respiratory epithelial cells of the developing mouse lung caused epithelial cell proliferation and hyperplasia as early as 4 to 6 weeks of age. While bronchiolar cell differentiation was normal, as indicated by b-tubulin and FOXJ1 expression in ciliated cells and by CCSP expression in nonciliated cells, cell proliferation (detected by expression of Ki-67, phospho-histone-H3, and cyclin D1) was increased and associated with activation of the AKT/mTOR survival pathway. Deletion of Pten caused papillary epithelial hyperplasia characterized by a hypercellular epithelium lining papillae with fibrovascular cores that protruded into the airway lumens. Cell polarity, as assessed by subcellular localization of cadherin, b-catenin, and zonula occludens-1, was unaltered. PTEN is required for regulation of epithelial cell proliferation in the lung and for the maintenance of the normal simple columnar epithelium characteristics of bronchi and bronchioles.