We report here the first attempt to produce and use whole acellular (AC) lung as a matrix to support development of engineered lung tissue from murine embryonic stem cells (mESCs). We compared the influence of AC lung, Gelfoam, Matrigel, and a collagen I hydrogel matrix on the mESC attachment, differentiation, and subsequent formation of complex tissue. We found that AC lung allowed for better retention of cells with more differentiation of mESCs into epithelial and endothelial lineages. In constructs produced on whole AC lung, we saw indications of organization of differentiating ESC into three-dimensional structures reminiscent of complex tissues. We also saw expression of thyroid transcription factor-1, an immature lung epithelial cell marker; pro-surfactant protein C, a type II pneumocyte marker; PECAM-1/CD31, an endothelial cell marker; cytokeratin 18; α-actin, a smooth muscle marker; CD140a or platelet-derived growth factor receptor-α; and Clara cell protein 10. There was also evidence of site-specific differentiation in the trachea with the formation of sheets of cytokeratin-positive cells and Clara cell protein 10–expressing Clara cells. Our findings support the utility of AC lung as a matrix for engineering lung tissue and highlight the critical role played by matrix or scaffold-associated cues in guiding ESC differentiation toward lung-specific lineages.