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Tight regulation of VEGF-A production and signaling is important for the maintenance of lung development and homeostasis. VEGF null mice have provided little insight into the role of VEGF during the later stages of lung morphogenesis. Therefore, we examined the in vitro effects of autocrine and paracrine VEGF-A production and the inhibition of VEGF-A signaling on a Flk-1-negative subset of fetal pulmonary mesenchymal cells (pMC). We hypothesized that VEGF-A receptor signaling regulates turnover of fetal lung mesenchyme in a cell cycle-dependent manner. VEGF receptor blockade with SU-5416 caused cell spreading and decreased proliferation and bcl-2 localization. Nuclear expression of the cell cycle inhibitory protein, p21, was increased with SU-5416 treatment, and p27 was absent. Autocrine VEGF production by pMC resulted in proliferation and p21/p27-dependent contact inhibition. In contrast, exogenous VEGF-A increased cell progression through the cell cycle. Selective activation of Flt by placental growth factor demonstrated the importance of this receptor/kinase in the VEGF-A responsiveness of pMC. The expression and localization of the survival factor bcl-2 was dependent on VEGF. These results provide evidence that VEGF-A plays a critical role in the regulation of fetal pulmonary mesenchymal proliferation, survival, and the subsequent development of normal lung architecture through bcl-2 and p21/p27-dependent cell cycle control.