Keratinocyte growth factor (KGF), an epithelial cell-specific, mesenchymal cell-derived growth factor, is a potent mitogen for alveolar type II epithelial cells both in vitro and in vivo. Increased proliferative activity of type II cells has been previously observed in neonatal rat lung coinciding with alveolar septation. To test the hypothesis that KGF expression is upregulated during alveolarization in the developing lung, we measured the mRNA content of KGF and its receptor, KGFR, in fetal and neonatal rat lung. Timed-pregnant Sprague-Dawley rats (gestation 22 days) and their litters were sacrificed on days 17, 19, and 21, or they were allowed to deliver and the neonatal rats were sacrificed on days 2, 4, 6, 8, and 10. Lung tissue was harvested and pooled, total RNA isolated, and KGF and KGFR mRNA content determined using Northern analysis. KGF mRNA levels increased steadily reaching maximal levels on day 8 in the neonatal rat. KGF mRNA levels, relative to levels present on day 17, increased significantly by 2.8, 4.0, 4.6, and 3.3-fold on days 4, 6, 8, and 10, respectively. In contrast, KGFR mRNA levels increased approximately 2-fold on days 21 and 2, as compared to levels present on day 17, which approached but did not reach statistical significance. KGFR mRNA levels subsequently decreased at the remaining neonatal time points. In conclusion, KGF mRNA content increased significantly during the late saccular and early alveolar stages of rat lung development. KGFR mRNA content was not significantly changed although the pattern of expression revealed an increase prior to and a decrease in mRNA content during the period of KGF mRNA upregulation. Our observations lend support to the hypothesis that KGF contributes to alveolarization and normal differentiation in the lung.