The development of the anterior foregut of the mammalian embryo involves changes in the behavior of both the epithelial endoderm and the adjacent mesoderm. Morphogenetic processes that occur include the extrusion of midline notochord cells from the epithelial definitive endoderm, the folding of the endoderm into a foregut tube, and the subsequent separation of the foregut tube into trachea and esophagus. Defects in foregut morphogenesis underlie the constellation of human birth defects known as esophageal atresia (EA) and tracheoesophageal fistula (TEF). Here, we review what is known about the cellular events in foregut morphogenesis and the gene mutations associated with EA and TEF in mice and humans. We present new evidence that about 70% of mouse embryos homozygous null for Nog, the gene encoding noggin, a bone morphogenetic protein (Bmp) antagonist, have EA/TEF as well as defects in lung branching. This phenotype appears to correlate with abnormal morphogenesis of the notochord and defects in its separation from the definitive endoderm. The abnormalities in foregut and lung morphogenesis of Nog null mutant can be rescued by reducing the gene dose of Bmp4 by 50%. This suggests that normal foregut morphogenesis requires that the level of Bmp4 activity is carefully controlled by means of antagonists such as noggin. Several mechanisms are suggested for how Bmps normally function, including by regulating the intercellular adhesion and behavior of notochord and foregut endoderm cells. Future research must determine how Noggin/Bmp antagonism fits into the network of other factors known to regulate tracheal and esophagus development, both in mouse or humans.