Separation of the single anterior foregut tube into the esophagus and trachea involves cell proliferation and differentiation, as well as dynamic changes in cell–cell adhesion and migration. These biological processes are regulated and coordinated at multiple levels through the interplay of the epithelium and mesenchyme. Genetic studies and in vitro modeling have shed light on relevant regulatory networks that include a number of transcription factors and signaling pathways. These signaling molecules exhibit unique expression patterns and play specific functions in their respective territories before the separation process occurs. Disruption of regulatory networks inevitably leads to defective separation and malformation of the trachea and esophagus and results in the formation of a relatively common birth defect, esophageal atresia with or without tracheoesophageal fistula (EA/TEF). Significantly, some of the signaling pathways and transcription factors involved in anterior foregut separation continue to play important roles in the morphogenesis of the individual organs. In this review, we will focus on new findings related to these different developmental processes and discuss them in the context of developmental disorders or birth defects commonly seen in clinics.