Growth and development of the fetal lungs is critically dependent on the degree to which the lungs are expanded by liquid; increases in fetal lung expansion accelerate lung growth, whereas reductions in lung expansion cause lung growth to cease. The mechanisms mediating expansion-induced lung growth are unknown, but likely include alterations in the expression of genes that regulate lung cell proliferation. Our aim was to isolate and identify genes that are up- or down-regulated by increased fetal lung expansion. In chronically catheterized fetal sheep at 126d GA, the left lung was expanded for 36h, whilst the right lung remained at a control level of expansion. Subtraction hybridization was used to isolate genes differentially expressed between the left and right lungs. Screening of ~6000 clones identified 1138 and 118 cDNA fragments that were up- and down-regulated by increased lung expansion, respectively. Northern blot analyses in separate groups of control fetuses and fetuses exposed to increased lung expansion were used to verify differential expression. Increased fetal lung expansion up-regulated heat shock protein 47, thrombospondin-1, TROP2, tropoelastin and tubulin3 in fetal lung tissue by ~200-300%; connective tissue growth factor and cysteine-rich angiogenic inducer 61 were increased by 20-30%. Genes down-regulated by increased fetal lung expansion included CCSP-related protein-1, elongation factor-1 and vitamin D₃ up-regulated protein 1. We conclude that an increase in fetal lung expansion differentially regulates the expression of numerous genes in lung tissue, many of which have important putative roles in lung development, while the functions of others are currently unknown.