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We employed a panel of antibodies directed against cytoskeletal and contractile proteins in a developmental study to follow the differentiation and distribution of smooth muscle-like cells in the rat lung. We observed that, in the mesenchyme around developing airways and vessels, desmin replaces vimentin as the predominant intermediate filament as specialization toward smooth muscle occurs. Normally, desmin and smooth muscle myosin were expressed together in the cells and their acquisition appeared indicative of terminal differentiation of smooth muscle. In this regard, the maturation of vascular smooth muscle is delayed in the lung relative to that surrounding the developing air passages. α-smooth muscle actin-containing cells form a thicker coat around the primitive airway tubes and extend farther down the tree than desmin or smooth muscle myosin-positive cells. This suggests that the α-actin is a marker for initial differentiation of smooth muscle cells and that these cells arise from the enveloping mesenchyme. In the pseudoglandular and canalicular lung, α-actin-containing cells were also found in regions of epithelial tube cleft formation, suggesting an association with the process of branching morphogenesis. In addition, a large complement of α-actin-positive but smooth muscle myosin-negative cells were observed in the saccular interstitium during the period of secondary saccule formation and capillary reorganization that leads to final alveolarization. In summary, we note an association of smooth muscle-like, α-actin-containing cells with areas and periods of remodeling during normal pulmonary development. This observation may have relevance to the repair process in the adult lung.