We have shown that pulmonary epithelial growth and differentiation can occur if pulmonary mesenchyme is replaced with a mixture of growth factors [total growth medium (TGM)] that consists of adult rat bronchoalveolar lavage fluid, insulin, epidermal growth factor (EGF), cholera toxin (CT), acidic fibroblast growth factor (aFGF), and fetal bovine serum. In the present study, we have defined the importance of specific components of TGM. Day 14 fetal rat distal lung epithelium, devoid of mesenchyme, was enrobed in growth factor-depleted Matrigel and cultured for 5 days in various soluble factors. We found that deleting aFGF or CT from TGM significantly reduced DNA synthesis. Epithelial proliferation was not significantly different when keratinocyte growth factor (KGF) replaced aFGF in TGM. KGF, however, required the presence of a basal medium containing CT, insulin, and serum for optimal proliferation. We then added specific growth factors to the basal medium and showed that aFGF and KGF were more potent mitogens than EGF, transforming growth factor-alpha, and hepatocyte growth factor. Additionally, basal medium + KGF also allowed progression to a distal alveolar phenotype. We conclude that aFGF and KGF may be important mediators in epithelial-mesenchymal interactions.