Lysophosphatidic acid (LPA) signaling through one of its receptors, LPA1, contributes to both the development and the pathological remodeling after injury of many organs. Because we found previously that LPA-LPA1 signaling contributes to pulmonary fibrosis, here we investigated whether this pathway is also involved in lung development. Quantitative assessment of lung architecture of LPA1-deficient knock-out (KO) and wild-type (WT) mice at 3, 12, and 24 weeks of age using design-based stereology suggested the presence of an alveolarization defect in LPA1 KO mice at 3 weeks, which persisted as alveolar numbers increased in WT mice into adulthood. Across the ages examined, the lungs of LPA1 KO mice exhibited decreased alveolar numbers, septal tissue volumes, and surface areas, and increased volumes of the distal airspaces. Elastic fibers, critical to the development of alveolar septa, appeared less organized and condensed and more discontinuous in KO alveoli starting at P4. Tropoelastin messenger RNA expression was decreased in KO lungs, whereas expression of matrix metalloproteinases degrading elastic fibers was either decreased or unchanged. These results are consistent with the abnormal lung phenotype of LPA1 KO mice, being attributable to reduced alveolar septal formation during development, rather than to increased septal destruction as occurs in the emphysema of chronic obstructive pulmonary disease. Peripheral septal fibroblasts and myofibroblasts, which direct septation in late alveolarization, demonstrated reduced production of tropoelastin and matrix metalloproteinases, and diminished LPA-induced migration, when isolated from LPA1 KO mice. Taken together, our data suggest that LPA-LPA1 signaling is critically required for septation during alveolarization.