Vascular endothelial growth factor (VEGF) is a potent endothelial cell mitogen involved in normal and abnormal angiogenesis. VEGF mRNA and protein are abundant in distal epithelium of midtrimester human fetal lung. In the present study, we identified immunoreactivity for KDR, a major VEGF-specific receptor, in distal lung epithelial cells of human fetal lung tissue, suggesting a possible autocrine or paracrine regulatory role for VEGF in pulmonary epithelial cell growth and differentiation. Addition of exogenous VEGF to human fetal lung explants resulted in increased epithelium volume density and lumen volume density in the tissues, both morphometric parameters of tissue differentiation. Cellular proliferation demonstrated by bromodeoxyuridine uptake was prominent in distal airway epithelial cells and increased in the VEGF-treated explants. VEGF-treated explants also demonstrated increased surfactant protein (SP) A mRNA, SP-C mRNA, and SP-A protein levels compared with controls. However, SP-B mRNA levels were unaffected by VEGF treatment. [(3)H]choline incorporation into total phosphatidylcholine was increased by VEGF treatment, but incorporation into disaturated phosphatidylcholine was not affected by exogenous VEGF. Based on these observations, we conclude that VEGF may be an important autocrine growth factor for distal airway epithelial cells in the developing human lung.