Normal lung development requires the temporally and spatially correct expression of numerous biologically-active molecules. Many of these molecules are soluble and include hormones, growth factors, bioactive peptides, and cytokines. Components of the insoluble extracellular matrix (ECM), including proteoglycans (PGs), have also been shown to play important roles in normal lung growth and differentiation. PGs are a diverse class of molecules that serve as structural substrata in which tissues develop, act as binding reservoirs for specific growth factors, and mediate such processes as cell-ECM, cell-cell, and ligand-receptor interactions. Our preliminary experiments have shown that sulfated PGs are required for lung morphogenesis and epithelial differentiation. Further experiments demonstrated that disrupting one subclass of PGs, chondroitin sulfate proteoglycans (CSPGs), had marked inhibitory effects on lung growth and branching in vitro. From these data we have hypothesized that CSPGs play an essential role(s) in normal lung development. In this proposal, we will test this hypothesis in two phases. In the first phase (Specific Aims 1 and 2), we will use in vitro models to confirm and extend our preliminary observations that inhibition of PGs suppresses lung growth, morphogenesis, and epithelial differentiation, and to define which effects are due to the disruption of CSPGs. In the second phase (Specific Aim 3), we will determine how our in vitro observations translate to lung development in vivo. Conditional expression of chimeric bacterial chondroitinase(s) targeted to the lungs of transgenic mice will allow us to assess the importance of CSPGs in three distinct phases of lung development in vivo: branching morphogenesis, maturation of the pulmonary surfactant system, and postnatal alveolization. Completion of this project will fill a significant gap in our understanding of the role of CSPGs in lung morphogenesis and differentiation, and will determine whether disruption of CSPGs causes lung pathologies similar to clinical disease in neonates. This knowledge will allow the development of new strategies for the prevention and treatment of lung diseases resulting from lung hypoplasia and immaturity.