© 2019. Published by The Company of Biologists Ltd. Organ growth and tissue homeostasis rely on the proliferation and differentiation of progenitor cell populations. In the developing lung, localized Fgf10 expression maintains distal Sox9-expressing epithelial progenitors and promotes basal cell differentiation in the cartilaginous airways. Mesenchymal Fgf10 expression is induced by Wnt signaling but inhibited by Shh signaling, and epithelial Fgf10 signaling activates β-catenin signaling. The Hippo pathway is a well-conserved signaling cascade that regulates organ size and stem/ progenitor cell behavior. Here, we show that Hippo signaling promotes lineage commitment of lung epithelial progenitors by curbing Fgf10 and β-catenin signaling. Our findings show that both inactivation of the Hippo pathway (nuclear Yap) or ablation of Yap result in increased β-catenin and Fgf10 signaling, suggesting a cytoplasmic role for Yap in epithelial lineage commitment. We further demonstrate redundant and non-redundant functions for the two nuclear effectors of the Hippo pathway, Yap and Taz, during lung development.