The regulation of the balance between proliferation and differentiation in the mesenchymal compartment of the lung is largely uncharacterized, unlike its epithelial counterpart. In this study, we determined that miR-142-3p contributes to the proper proliferation of mesenchymal progenitors by controlling the level of WNT signaling. miR-142-3p can physically bind to adenomatous polyposis coli mRNA, functioning to regulate its expression level. In miR-142-3p loss-of-function experiments, proliferation of parabronchial smooth muscle cell progenitors is significantly impaired, leading to premature differentiation. Activation of WNT signaling in the mesenchyme, or Apc loss of function, can both rescue miR-142-3p knockdown. These findings show that in the embryonic lung mesenchyme, the microRNA machinery modulates the level of WNT signaling, adding an extra layer of control in the feedback loop between FGFR2C and β-cateninmediated WNT signaling. © 2014. Published by The Company of Biologists Ltd.