In the developing tracheal system of Drosophila melanogaster, six major branches arise by guided cell migration from a sac-like structure. The chemoattractant Branchless/FGF (Bnl) appears to guide cell migration and is essential for the formation of all tracheal branches, while Decapentaplegic (Dpp) signaling is strictly required for the formation of a subset of branches, the dorsal and ventral branches. Using in vivo confocal video microscopy, we find that the two signaling systems affect different cellular functions required for branching morphogenesis. Bnl/FGF signaling affects the formation of dynamic filopodia, possibly controlling cytoskeletal activity and motility as such, and Dpp controls cellular functions allowing branch morphogenesis and outgrowth.