Adenosine signaling has been characterized in various physiological systems, but little is known about the role of adenosine signaling in lung development. Alveogenesis and microvascular maturation are the final stages in lung development in mammals. Alveogenesis in the mouse begins on postnatal day 5 when the process of secondary septation plays a pivotal role in the expansion of the alveolar sacs and microvascular maturation. Adenosine deaminase null mice (ADA^-/-) exhibit abnormalities in alveogenesis in association with elevated lung adenosine levels. Large scale gene expression analysis of ADA^-/- lungs using oligonucleotide based microarrays revealed novel relationships between gene expression patterns and elevated lung adenosine during the stages of alveolar maturation. Genes regulating apoptosis, proliferation and vascular development were shown to be altered and decreased cell proliferation in association with increased alveolar type II cell apoptosis were shown to contribute to abnormal secondary septation in these mice. ADA enzyme therapy allowed for normal patterns of apoptosis, proliferation and alveolar development in association with prevention of adenosine elevations. These findings were correlated with the presence of adenosine receptors in the developing lung suggesting the involvement of receptor signaling. These studies provide evidence that elevated lung adenosine can lead to abnormal alveogenesis by disrupting patterns of cell proliferation and apoptosis.