Recent studies have shown that mesothelial progenitors contribute to mesenchymal lineages of developing organs. To what extent the overlying mesothelium contributes to lung development remains unknown. To rigorously address this question, we employed Wt1CreERT2/+ mice for high-fidelity lineage tracing after confirming that Cre recombinase was mesothelial specific and faithfully recapitulated endogenous Wilms’ tumor 1 (Wt1) gene expression. We visualized WT1+ mesothelial cell entry into the lung by live imaging and identified their progenies in subpopulations of bronchial smooth muscle cells, vascular smooth muscle cells and desmin+ fibroblasts by lineage tagging. Derivation of these lineages was only observed with Cre recombinase activation during early lung development. Using loss-of-function assays in organ cultures, and targeted mesothelial-restricted hedgehog loss-of-function mice, we demonstrated that mesothelial cell movement into the lung requires the direct action of hedgehog signaling. By contrast, hedgehog signaling was not required for fetal mesothelial heart entry. These findings further support a paradigm wherein the mesothelium is a source of progenitors for mesenchymal lineages during organogenesis and indicate that signals controlling mesothelial cell entry are organ specific.