The lungs are generated by branching morphogenesis as a result of reciprocal signalling interactions between the epithelium and mesenchyme during development. Mutations that disrupt formation of either the correct number or shape of epithelial branches affect lung function. This, in turn, can lead to congenital abnormalities such as cystadenomatoid malformations, pulmonary hypertension or lung hypoplasia. Defects in lung architecture are also associated with adult lung disease, particularly in cases of idiopathic lung fibrosis. Identifying the signalling pathways which drive epithelial tube formation will likely shed light on both congenital and adult lung disease. Here we show that mutations in the planar cell polarity (PCP) genes Celsr1 and Vangl2 lead to disrupted lung development and defects in lung architecture. Lungs from Celsr1(Crsh) and Vangl2(Lp) mouse mutants are small and misshapen with fewer branches, and by late gestation exhibit thickened interstitial mesenchyme and defective saccular formation. We observe a recapitulation of these branching defects following inhibition of Rho kinase, an important downstream effector of the PCP signalling pathway. Moreover, epithelial integrity is disrupted, cytoskeletal remodelling perturbed and mutant endoderm does not branch normally in response to the chemoattractant FGF10. We further show that Celsr1 and Vangl2 proteins are present in restricted spatial domains within lung epithelium. Our data show that the PCP genes Celsr1 and Vangl2 are required for foetal lung development thereby revealing a novel signalling pathway critical for this process that will enhance our understanding of congenital and adult lung diseases and may in future lead to novel therapeutic strategies.