Congenital lung malformations are fatal at birth in their severe forms. Prevention and early intervention of these birth defects require a comprehensive understanding of the molecular mechanisms of lung development. We find that the loss of inturned (Intu), a cilia and planar polarity effector gene, severely disrupts growth and branching morphogenesis of the mouse embryonic lungs. Consistent with our previous results indicating an important role for Intu in ciliogenesis and hedgehog (Hh) signaling, we find greatly reduced number of primary cilia in both the epithelial and mesenchymal tissues of the lungs. We also find significantly reduced expression of Gli1 and Ptch1, direct targets of Hh signaling, suggesting disruption of cilia-dependent Hh signaling in Intu mutant lungs. An agonist of the Hh pathway activator, smoothened, increases Hh target gene expression and tubulogenesis in explanted wild type, but not Intu mutant, lungs, suggesting impaired Hh signaling response underlying lung morphogenetic defects in Intu mutants. Furthermore, removing both Gli2 and Intu completely abolishes branching morphogenesis of the lung, strongly supporting a mechanism by which Intu regulates lung growth and patterning through cilia-dependent Hh signaling. Moreover, a transcriptomics analysis identifies around 200 differentially expressed genes (DEGs) in Intu mutant lungs, including known Hh target genes Gli1, Ptch1/2 and Hhip. Genes involved in muscle differentiation and function are highly enriched among the DEGs, consistent with an important role of Hh signaling in airway smooth muscle differentiation. In addition, we find that the difference in gene expression between the left and right lungs diminishes in Intu mutants, suggesting an important role of Intu in asymmetrical growth and patterning of the mouse lungs.