Several studies using transgenic and conventional or conditional knock-out mice have clearly demonstrated the key role played by BMPs during early lung development [14, 15, 16, 17, 18, 19, 20, 21] . Disruption of BMP signaling by ectopically expressing the BMP antagonists noggin or gremlin in the lung epithelium [15, 22] , inactivating BMP receptors [16] or expressing a dominant negative form of the BMP Type-I receptor (dnALK6) result in abnormal distal lung architecture. Remarkably, over-activation of the BMP pathway is also incompatible with normal lung development. Ectopic over-expression of Bmp4 in the epithelium leads to smaller lungs and to substantially reduced epithelial cell proliferation [14] and mice with deletion of the BMP antagonist Follistatin-Like 1 (Fstl1) gene die at birth from respiratory distress and show multiple defects in lung development [23, 24] .