Airway smooth muscle (ASM) is an integral component of the primordial lung. It differentiates from the mesenchyme as a ring of cells around the base of the epithelial bud that express smooth muscle-specific proteins. These rapidly form into interlocking bundles that progressively become wider and more compact along the bronchial tree to the trachea. Their orientation is perpendicular to the long axis of the airway. The ASM exhibits rhythmic contractility (i.e. it is a phasic-type smooth muscle) soon after formation, and the spontaneous airway narrowing shifts the lung liquid distally causing expansion of the tubule walls. This stretching is the mechanical stimulus to smooth muscle (SM) myogenesis and lung growth. Neural tissue, i.e. precursor ganglia interconnected by nerve trunks and smaller bundles, forms a sheath over the ASM layer with varicose fibres descending to the muscle. These are guided by glial-derived neurotrophic factor (GDNF) that appears to be produced by ASM. Maturation of neural tissue is slower than the ASM; functional cholinergic innervation is manifest by the early canalicular stage when most neurotransmitters appear.