Mesothelial Fibroblast Growth Factor 9 (Fgf9) has been demonstrated by inactivation studies in mouse to be critical for the proliferation of the mesenchyme. We now show that Fgf9 is also expressed at significant levels in the distal epithelium from the mid-pseudoglandular stages. Using mesenchymal-free lung endoderm culture, we show that FGF9 triggers the proliferation of the distal epithelium leading to the formation of a cyst-like structure. On embryonic Fgfr2b-/- lungs, FGF9 induces proliferation of the mesenchyme but fails to trigger a similar effect on the epithelium, therefore involving the FGFR2b receptor in the proliferative response of the epithelium to FGF9. While FGF9 inhibits the differentiation of the mesenchyme, the epithelium appears to differentiate normally. At the molecular level, FGF9 up-regulates Fgf10 expression in the mesenchyme likely via increased expression of Tbx4 and 5 and controls the transcription of Hedgehog targets Ptc and Gli-1 in a Hedgehog-independent manner. We also show that FGF9 inhibits the activation of the canonical Wnt pathway in the epithelium by increasing Dkk1 expression, a canonical Wnt antagonist. Our work shows for the first time that FGF9 acts on the epithelium involving FGFR2b to control its proliferation but not its differentiation and contributes to the regulation of canonical Wnt signaling in the epithelium.

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