The Smad2/3 pathway plays a key role in mediating TGF-beta1 inhibition of branching morphogenesis and induction of connective tissue growth factor (CTGF) expression in embryonic lungs. Because a number of cell-specific interactions have been described between TGF-beta1-driven Smad signaling and the c-Jun N-terminal kinase (JNK) pathway, we have investigated the effects of JNK inhibition on TGF-beta1 activation of Smad2, inhibition of branching, induction of CTGF expression, and apoptosis in mouse embryonic lung explants. Mouse embryonic day 12.5 (E12.5) lung explants were treated with TGF-beta1 in the presence or absence of a specific pharmacologic JNK inhibitor (SP600125) and a specific JNK peptide inhibitor (JNKI). We found that TGF-beta1 activated the JNK pathway by stimulating c-Jun phosphorylation, which was blocked by JNK inhibitors. Treatment with SP600125 stimulated Smad2 phosphorylation and enhanced TGF-beta1-induced Smad2 phosphorylation. Treatment with JNK inhibitors also decreased normal branching morphogenesis and induced CTGF expression as well as augmented TGF-beta1 inhibition of branching and induction of CTGF expression. Furthermore, JNK inhibition-induced apoptosis. Our results demonstrate that inhibition of the JNK pathway promotes TGF-beta1-driven Smad2 responses in lung branching morphogenesis. These data suggest that the JNK pathway may antagonize TGF-beta1 dependent Smad2 signaling during mouse embryonic lung development.