Yap and its subcellular localization have distinct compartment-specific roles in the developing lung.

Although the Hippo-yes-associated protein (Yap) pathway has been implicated in lung development, the specific roles for Yap and its nucleocytoplasmic shuttling in the developing airway and alveolar compartments remain elusive. Moreover, conflicting results from expression studies and differences in the lung phenotypes of Yap and Hippo kinase null mutants caused controversy over the dynamics and significance of Yap subcellular localization in the developing lung. Here, we show that the aberrant morphogenesis of Yap-deficient lungs results from the disruption of developmental events specifically in distal epithelial progenitors. We also show that activation of nuclear Yap is enough to fulfill the Yap requirements to rescue abnormalities in these lungs. Remarkably, we found that Yap nucleocytoplasmic shuttling is largely dispensable in epithelial progenitors for both branching morphogenesis and sacculation. However, if maintained transcriptionally active in airways, nuclear Yap profoundly alters proximal-distal identity and halts epithelial differentiation. Taken together, these observations provide novel insights into the crucial importance of Hippo-Yap signaling in the lung prenatally.