Pulmonary alveolar fibroblasts produce extracellular matrix in a temporally and spatially regulated pattern to yield a durable, yet pliable gas-exchange surface. Proliferation ensures a sufficient complement of cells, but they must differentiate into functionally distinct subtypes: contractile myofibroblasts (MF) which generate elastin and regulate air-flow at the alveolar ducts; and in mice and rats, lipofibroblasts (LF), which store neutral lipids. Platelet-derived growth factor (PDGF)-A is required, but acts in conjunction with other differentiation factors arising from adjacent epithelia or within fibroblasts. We hypothesized that fibroblast growth factor-receptor (FGFR) expression and function varies for MF and LF and contributes to their divergent differentiation. Whereas approximately half of the FGFR3 was extracellular in MF, FGFR2 and FGFR4 were primarily intracellular. Intracellular FGFR3 localized to the multivesicular body, and its abundance may be modified by Sprouty and interaction with heat shock protein-90 (HSP90). Fibroblast growth factor (FGF)18 mRNA is more abundant in MF, whereas FGF10 mRNA predominated in LF, which also express FGFR1 IIIb, a receptor for FGF10. Fgf18 diminished fibroblast proliferation and was chemotactic for cultured fibroblasts. Although PDGF-receptor alpha (PDGFRα) primarily signals through phosphoinositide 3-kinase and Akt, p42/p44 MAP-kinase (Erk1/2), a major signaling pathway for FGFRs, influenced the abundance of cell-surface PDGFRα. Observing different FGF receptor and ligand profiles in MF and LF, is consistent with their divergent differentiation even though both subpopulations express PDGFRα. These studies also emphasize the importance of particular cellular locations of FGFR3 and PDGFRα, which may modify their effects during alveolar development or repair.