To identify direct transcriptional targets of Nkx2-1 that could be effectors of its developmental functions we performed ChIP-chip analyses in early and late developing mouse lung. The differential GSI-IX expression pattern of Nkx2-1 at these developmental stages allowed us to evaluate Nkx2-1 targets in cell populations undergoing proliferation at E11.5 and differentiation at E19.5. In this work, we identified a preferential role for Nkx2-1 in direct transcriptional regulation of proliferation-related genes in early development and of ion transport genes in late development. Nkx2-1 regulation of lung cell proliferation and survival was previously shown in development and tumor cell lines, but the effector genes directly regulated by Nkx2-1 were largely unknown. Amongst several proliferation-related genes targeted by Nkx2-1, we identified E2f3, cyclins Ccnb1 and Ccnb2, and c-Met. E2f3 controls the rate of cell proliferation by controlling the G1/S transition and the initiation of DNA synthesis and is expressed in the lung epithelium in early development. Cyclins Ccnb1 and Ccnb2 regulate the G2/M phase transition and are ubiquitously expressed in the lung during development. Ccnb1, E2f3 and other proliferation genes are mostly bound by Nkx2-1 at E11.5 but not at E19.5. Binding of Nkx2-1 to the promoters of these genes correlates with increased expression, and with proliferative state of the epithelial cells in early lung development. c-Met is a proto-oncogene and the HGF receptor tyrosine kinase expressed in E13 mouse lung epithelium and thereafter, where it is involved in mitosis, migration and morphogenesis. Reduction of Nkx2-1 expression in cell lines alters expression of these genes, and slows down cell cycle progression. In vivo, the absence of Nkx2-1 results in impaired lung epithelial lineage expansion and branching morphogenesis. These findings make us speculate that reduced expression of genes involved in cell proliferation and progression of the cell cycle may contribute to the hypomorphic lung phenotype observed in Nkx2- 1 null embryos. It will be interesting in the future to determine if altered expression of the genes identified precludes distal lung epithelial progenitor cells to proliferate and engage in the process of branching morphogenesis. A different context is observed at E19.5, when Nkx2-1 expressing cells are differentiating and preparing for the rapid absorption of luminal fluid and for the first breath. Nkx2-1 binding to ion transport genes in distal lung epithelial cells at E19.5 suggests that Nkx2-1 participates in differentiation of the distal lung epithelium to perform these functions at birth. Gene expression analyses of E18 lungs harboring a Nkx2-1 phosphorylation- deficient mutant also show reduced expression of genes that regulate fluid and electrolyte transport supporting a direct link between Nkx2-1 and these functions. Our results may also have Doxorubicin important implications for understanding NKX2-1 functions in lung cancer.