Prenatal airways from diverse species are capable of spontaneous peristaltic contractions in each trimester. The function of this smooth muscle activity is unknown. We demonstrate that peristalsis of the embryonic airway originates from a sided pacemaker focus, is stimulated in a calcium-dependent fashion by the pulmonary morphogen fibroblast growth factor-10 (FGF-10), and appears coupled to lung growth. Airway peristalsis may be crucial for lung development (thereby providing a physiologic role for airway smooth muscle) and play a hitherto unanticipated role in reported transgenic mutant lung phenotypes.