Detailed expression analysis and genetic lineage tracing analyses showed that cells derived from the TBX2+ cell lineage represent a multipotent precursor population of the embryonic pulmonary mesenchyme. Analyses in TBX2 loss-and gain-of-function mutant lungs revealed that lineage diversification was independent of TBX2, however, minor defects in the development and physiology of the bronchial smooth muscle layer were observed.Transcriptomic- and ChIP-seq data identified Interleukin 33 (Il33) and cellular communication network factor 4 (Ccn4) as additional direct target genes of TBX2 and de novo motif analysis of the DNA regions bound by TBX2 revealed an enrichment of homeobox and high-mobility-group (HMG) box consensus sequences.Proteomic analysis revealed that TBX2 interacts with several proteins, such as PBX1, HMGB2, DNMT1 and members of the NuRD complex (HDAC1, HDAC2, CHD4) to exert DNA binding and histone/chromatin modifications to repress its target genes in the lung mesenchyme.