We have characterized the distribution of neural tissue and its primary target tissue, airway smooth muscle (ASM), in an in vitro mouse model of early lung development comprising left lung lobes at embryonic Day 12, cultured for 2 or 5 d. Neural tissue was detected with antibodies to protein gene product 9.5 (PGP 9.5), synapsin, and p75NTR (the low-affinity neurotrophin receptor), and smooth muscle with an antibody to alpha-actin. Imaging by confocal microscopy revealed few PGP 9.5-positive neurons at the start of culture; after 2 d clusters of neurons and nerve fibers had appeared along the lobar bronchus and after 5 d along the secondary and tertiary branches. Neural tissue did not just follow the smooth muscle-covered tubules, as seen in vivo, but also grew outside the lobes onto a wide layer of alpha-actin-positive cells, suggesting that smooth muscle may express a trophic factor that attracts nerves. Explants cultured with glial-derived neurotrophic factor (GDNF) exhibited a striking increase in the amount of p75NTR- and PGP 9.5-positive tissue outside the lobes, whereas GDNF-impregnated beads attracted neuronal precursors and influenced the direction of neurite extension. We show that the mouse lung explant is suitable for investigating trophic signals involved in pulmonary innervation and that GDNF may have a role in the early innervation of the developing airways.