Epithelial gene expression in the lung is thought to be regulated by the coordinate activity of several different families of transcription factors including the Fox family of winged-helix/forkhead DNA-binding proteins. In this report, we have identified and characterized two members of this Fox gene family, Foxp1 and Foxp2, and show that they comprise a new subfamily of Fox genes expressed in the lung. Foxp1 and Foxp2 are expressed at high levels in the lung as early as E12.5 of mouse development with Foxp2 expression restricted to the airway epithelium. In addition, Foxp1 and Foxp2 are expressed at lower levels in neural, intestinal, and cardiovascular tissues during development. Upon differentiation of the airway epithelium along the proximal-distal axis, Foxp2 expression becomes restricted to the distal alveolar epithelium whereas Foxp1 expression is observed in the distal epithelium and mesenchyme. Foxp1 and Foxp2 can regulate epithelial lung gene transcription as was demonstrated by their ability to dramatically repress the mouse CC10 promoter and, to a lesser extent, the human surfactant protein C promoter. In addition, GAL4 fusion proteins encoding subdomains of Foxp1 and Foxp2 demonstrate that an independent and homologous transcriptional repression domain lies within the N-terminal end of the proteins. Together, these studies suggest that Foxp1 and Foxp2 are important regulators of lung epithelial gene transcription.