We present an initial characterization of the murine Gsh-4 gene which is shown to encode a LIM-type homeodomain. Genes in this category are known to control late developmental cell-type specification events in simpler organisms. Whole mount and serial section in situ hybridizations show transient Gsh-4 expression in ventrolateral regions of the developing neural tube and hindbrain. Mice homozygous for a targeted mutation in Gsh-4 suffer early postnatal death resulting from immature lungs which do not inflate. Prenatal administration of progesterone and glucocorticoid, to extend gestational term and accelerate maturation, resulted in lung inflation at birth. Nevertheless, the hormonally treated mutants generally failed to survive beyond an hour after birth, due to ineffective breathing efforts. It is concluded that Gsh-4 plays a critical role in the development of respiratory control mechanisms and in the normal growth and maturation of the lung.