The cAMP response element binding protein 1 (Creb1) transcription factor regulates cellular gene expression in response to elevated levels of intracellular cAMP. Creb1(-/-) fetal mice are phenotypically smaller than wildtype littermates, predominantly die in utero and do not survive after birth due to respiratory failure. We have further investigated the respiratory defect of Creb1(-/-) fetal mice during development. Lungs of Creb1(-/-) fetal mice were pale in colour and smaller than wildtype controls in proportion to their reduced body size. Creb1(-/-) lungs also did not mature morphologically beyond E16.5 with little or no expansion of airway luminal spaces, a phenotype also observed with the Creb1(-/-) lung on a Crem(-/-) genetic background. Creb1 was highly expressed throughout the lung at all stages examined, however activation of Creb1 was detected primarily in distal lung epithelium. Cell differentiation of E17.5 Creb1(-/-) lung distal epithelium was analysed by electron microscopy and showed markedly reduced numbers of type-I and type-II alveolar epithelial cells. Furthermore, immunomarkers for specific lineages of proximal epithelium including ciliated, non-ciliated (Clara), and neuroendocrine cells showed delayed onset of expression in the Creb1(-/-) lung. Finally, gene expression analyses of the E17.5 Creb1(-/-) lung using whole genome microarray and qPCR collectively identified respiratory marker gene profiles and provide potential novel Creb1-regulated genes. Together, these results demonstrate a crucial role for Creb1 activity for the development and differentiation of the conducting and distal lung epithelium.