AbstractIn the current study, the role of contractile activity of respiratory muscles in fetal lung growth and cell differentiation was examined using Myf5−/−:MyoD−/− mouse embryos. As previously found, Myf5−/−:MyoD−/− mouse embryos had no respiratory musculature. Consequently, they suffered from pulmonary hypoplasia and died shortly after birth. The hypoplastic lung had decreased proliferation and increased apoptotic index as early as embryonic day 14.5. By contrast, only at the last gestational day, the number of lung cells expressing platelet derived growth factor B and insulin growth factor I was decreased, while the gradient of the thyroid transcription factor 1 was not maintained. Type II pneumocytes had a failure in glycogen utilization and surfactant storage and secretion but were able to synthesize the surfactant‐associated proteins. Type I pneumocytes were readily detectable using an early differentiation marker (i.e., Gp38). However, the late differentiation of type I pneumocytes never occurred, as revealed by transmission electron microscopy. Together, our findings suggest that pulmonary distension due to fetal breathing‐like movements plays an important role not only in lung growth but also in lung cell differentiation. Developmental Dynamics 233:772–782, 2005. © 2005 Wiley‐Liss, Inc.