ACTA2 expression identifies pulmonary airway and vascular smooth muscle cells (SMCs) as well as alveolar myofibroblasts (MYF). Mesenchymal progenitors expressing fibroblast growth factor 10 (Fgf10), Wilms tumor 1 (Wt1), or glioma-associated oncogene 1 (Gli1) contribute to SMC formation from early stages of lung development. However, their respective contribution and specificity to the SMC and/or alveolar MYF lineages remain controversial. In addition, the contribution of mesenchymal cells undergoing active WNT signaling remains unknown. Using Fgf10^CreERT2, Wt1^CreERT2, Gli1^CreERT2, and Axin2^CreERT2 inducible driver lines in combination with a tdTomato^flox reporter line, the respective differentiation of each pool of labeled progenitor cells along the SMC and alveolar MYF lineages was quantified. The results revealed that while FGF10⁺ and WT1⁺ cells show a minor contribution to the SMC lineage, GLI1⁺ and AXIN2⁺ cells significantly contribute to both the SMC and alveolar MYF lineages, but with limited specificity. Lineage tracing using the Acta2-CreERT2 transgenic line showed that ACTA2⁺ cells labeled at embryonic day (E)11.5 do not expand significantly to give rise to new SMCs at E18.5. However, ACTA2⁺ cells labeled at E15.5 give rise to the majority (85%–97%) of the SMCs in the lung at E18.5 as well as alveolar MYF progenitors in the lung parenchyma. Fluorescence-activated cell sorting-based isolation of different subpopulations of ACTA2⁺ lineage-traced cells followed by gene arrays, identified transcriptomic signatures for alveolar MYF progenitors versus airway and vascular SMCs at E18.5. Our results establish a new transcriptional landscape for further experiments addressing the function of signaling pathways in the formation of different subpopulations of ACTA2⁺ cells.