Sproutys and Sprouty-related proteins, Spred-1 and -2, are known inhibitors of fibroblast growth factor (FGF) signaling, which plays key role in lung branching morphogenesis and the development of other tissues. The present study demonstrates that Spreds are expressed in a variety of rat embryonic tissues (brain, intestine, heart, skin) including the lung. In the embryonic lung, Spreds and Sproutys are expressed during the early stages of branching morphogenesis, but their expression profiles are both distinct and overlapping. Spreds are predominantly expressed in mesenchymal cells in contrast to Sproutys, which are abundantly expressed in epithelial cells. Spred expression is especially strong in the regions of new bud formation both in the peripheral mesenchyme as well as in the epithelium. The peripheral region also expresses FGF-10 in the mesenchymal cells and FGF-9 in the mesothelial cells. The expression profiles suggest that Spreds, Sproutys and FGF-9/FGF-10 are part of epithelial-mesenchymal interactions, which are essential for the development and maintenance of normal lung branching pattern.