GATA-6, a member of the GATA family of zinc finger proteins, is the only family member known to be expressed in the epithelial cells of the developing airway epithelium. To determine the role of GATA-6 in lung morphogenesis, a chimeric fusion protein containing GATA-6 and the strong transcriptional inhibitor, engrailed, was conditionally expressed in mice under control of a doxycycline-inducible transgene. Expression of GATA-6-engrailed was initiated at embryonic day (E)6–7 by treatment of the dam with doxycycline. Although branching morphogenesis of the proximal airways proceeded normally toE16.5, maturation of terminal airways and alveoli that normally occurs before birth was inhibited. AtE17.5–18.5, aquaporin-5 mRNA and type I cell marker-α staining, both markers of type I cells, were decreased. Homogenous distribution of the thyroid transcription factor-1, decreased expression of surfactant proteins, delayed thinning of the walls of the peripheral airways, and lack of squamous differentiation of epithelial cells were observed in the lung periphery after expression of GATA-6-engrailed. Activity of GATA-6 is required for maturation of the gas exchange area before birth.