The absence of eGFP reporter activation in the distal buds of the branching airway tree (Figures 1 and 4) prompted us to investigate whether this is the result of an intrinsic inability of the distal epithelium to activate the canonical BMP pathway or, in accordance to the second model, the result of a dynamic interplay with the adjacent mesenchyme. Therefore, mesenchyme free distal epithelial buds and epithelial free mesenchyme were isolated as previously described [35, 36] and cultured in Matrigel. Remarkably, within 8 hours of incubation, the BRE-eGFP reporter was strongly up-regulated in the mesenchyme-free epithelial buds and conversely it exhibited a tendency for decline in the isolated mesenchyme ( Figure 5 ). These findings are consistent with the model of Bragg et al. [51] and moreover suggest that the elusive, mesenchyme derived, epithelial growth promoting signal could simply act by negatively regulating activation of the canonical BMP pathway in the distal epithelium buds.