The mammalian respiratory system—the trachea and the lungs—arises from the anterior foregut through a sequence of morphogenetic events involving reciprocal endodermal-mesodermal interactions. The lung itself consists of two highly branched, tree-like systems—the airways and the vasculature—that develop in a coordinated way from the primary bud stage to the generation of millions of alveolar gas exchange units. We are beginning to understand some of the molecular and cellular mechanisms that underlie critical processes such as branching morphogenesis, vascular development, and the differentiation of multipotent progenitor populations. Nevertheless, many gaps remain in our knowledge, the filling of which is essential for understanding respiratory disorders, congenital defects in human neonates, and how the disruption of morphogenetic programs early in lung development can lead to deficiencies that persist throughout life.