Transforming growth factor (TGF) β plays an important role in normal pulmonary morphogenesis and function and in the pathogenesis of lung disease. The effect of TGFβ is regulated via a selective pathway of TGFβ synthesis and signaling that involves activation of latent TGFβ, specific TGFβ receptors, and intracellular signaling via Smad molecules. All three isoforms of TGFβ are expressed at high levels during normal lung development, being particularly important for branching morphogenesis and epithelial cell differentiation with maturation of surfactant synthesis. Small amounts of TGFβ are still present in the adult lung, and TGFβ is involved in normal tissue repair following lung injury. However, in a variety of forms of pulmonary pathology, the expression of TGFβ is increased. These include chronic lung disease of prematurity as well as several forms of acute and chronic adult lung disease. While TGFβ1 appears to be the predominant isoform involved, elevated levels of all three isoforms have been demonstrated. The increase in TGFβ precedes abnormalities in lung function and detectable lung pathology, but correlates with the severity of the disease. TGFβ plays a key role in mediating fibrotic tissue remodeling by increasing the production and decreasing the degradation of connective tissue via several mechanisms.