Although the importance of platelet-derived growth factor receptor (PDGFR)-α signaling during normal alveogenesis is known, it is unclear whether this signaling pathway can regulate realveolarization in the adult lung. During alveolar development, PDGFR-α–expressing cells induce α smooth muscle actin (α-SMA) and differentiate to interstitial myofibroblasts. Fibroblast growth factor (FGF) signaling regulates myofibroblast differentiation during alveolarization, whereas peroxisome proliferator-activated receptor (PPAR)-γ activation antagonizes myofibroblast differentiation in lung fibrosis. Using left lung pneumonectomy, the roles of FGF and PPAR-γ signaling in differentiation of myofibroblasts from PDGFR-α–positive precursors during compensatory lung growth were assessed. FGF receptor (FGFR) signaling was inhibited by conditionally activating a soluble dominant-negative FGFR2 transgene. PPAR-γ signaling was activated by administration of rosiglitazone. Changes in α-SMA and PDGFR-α protein expression were assessed in PDGFR-α–green fluorescent protein (GFP) reporter mice using immunohistochemistry, flow cytometry, and real-time PCR. Immunohistochemistry and flow cytometry demonstrated that the cell ratio and expression levels of PDGFR-α–GFP changed dynamically during alveolar regeneration and that α-SMA expression was induced in a subset of PDGFR-α–GFP cells. Expression of a dominant-negative FGFR2 and administration of rosiglitazone inhibited induction of α-SMA in PDGFR-α–positive fibroblasts and formation of new septae. Changes in gene expression of epithelial and mesenchymal signaling molecules were assessed after left lobe pneumonectomy, and results demonstrated that inhibition of FGFR2 signaling and increase in PPAR-γ signaling altered the expression of Shh, FGF, Wnt, and Bmp4, genes that are also important for epithelial–mesenchymal crosstalk during early lung development. Our data demonstrate for the first time that a comparable epithelial–mesenchymal crosstalk regulates fibroblast phenotypes during alveolar septation.