Epidermal growth factor (EGF) has been found to stimulate DNA synthesis in both the trachea and bronchial tree of 5-day-old chick embryo lung rudiments in organ culture. After 20 h culture in the presence of 10 ng/ml EGF, the incorporation of tritiated thymidine into DNA is stimulated two- to three-fold following a 2 h labelling period, as revealed by scintillation counting. Autoradiographic data indicate that this stimulation is most marked in the epithelial tissue component of both the trachea and bronchial tree. Supernumerary "lung" buds have been induced in the normally unbranched tracheal epithelium by agarose pellets containing EGF, such buds having been previously induced only by grafting a variety of mesenchymal tissues alongside the tracheal epithelium. Since EGF has been shown to be a potent stimulator of tracheal DNA synthetic activity it is suggested that the induction of supernumerary buds by the EGF-agarose pellets is achieved through a localized stimulation of cell proliferation in the tracheal epithelium. These data would further suggest that the induction of supernumerary tracheal buds by various mesenchymal tissues is similarly due to a localized increase in mitotic activity resulting from the action of some mitotic stimulator substance(s) emanating from the inducing mesenchymal tissue. This conclusion may be extended to include normal bud formation which occurs during branching morphogenesis in several developing organ systems.