The respiratory system, which consists of the lungs, trachea and associated vasculature, is essential for terrestrial life. In recent years, extensive progress has been made in defining the temporal progression of lung development, and this has led to exciting discoveries, including the derivation of lung epithelium from pluripotent stem cells and the discovery of developmental pathways that are targets for new therapeutics. These discoveries have also provided new insights into the regenerative capacity of the respiratory system. This Review highlights recent advances in our understanding of lung development and regeneration, which will hopefully lead to better insights into both congenital and acquired lung diseases.