Exogenous retinoids alter pattern formation and differentiation in many developing systems, such as limb, vertebrae, and central nervous system. Many of these effects are mediated by changes in expression of patterning genes such as Hox genes and Sonic hedgehog. We have previously shown that exogenous retinoic acid, administered to the embryonic rat lung in culture alters the structural pattern of the developing lung, suppressing formation of distal lung and favoring growth of proximal tubules. To determine whether these retinoic acid-induced changes in lung development were linked to alterations in pattern-related genes, we characterized the expression of Hoxa-2, Hoxb-6, and Sonic hedgehog mRNAs in vivo and in vitro, with or without 10(-5)M retinoic acid, by in situ hybridization and quantitative polymerase chain reaction. Each of these genes demonstrated unique timing and distribution of expression that was similar in vivo and in control cultured embryonic lungs. Hoxb-6 and Sonic hedgehog mRNAs both decreased during lung development in vivo or in vitro. From the patterns of mRNA expression we propose that Hoxb-6 is involved in distal airway branching while Hoxa-2 is involved in differentiation of proximal mesenchymal derivatives and vasculogenesis in the lung. RA upregulated all three genes, changing their developmental pattern of distribution and preventing the developmental decrease in Sonic hedgehog expression. We propose that RA acts to maintain high levels of expression of these and likely other pattern-related genes in a fashion that is characteristic of the immature lung, promoting continued formation of proximal lung structures and preventing formation of typical distal lung structures of the mature lung.