Cre‐expressing mouse lines constitute an important asset to mammalian genetics, allowing the deletion of genes in a spatio‐temporal specific manner. Our study on Hox gene function in lung development has led us to use a lung endoderm‐specific deletion with the Sftpc‐cre mouse line expressing the Cre recombinase gene under the control of human surfactant protein C regulatory sequences. In control experiments, the Cre recombinase faithfully activated the Rosa26‐lacZ reporter gene in lung epithelium. However as early as e15.5, lungs from Sftp‐Cre⁺ embryos showed abnormal dilated cysts. This unexpected phenotype was also observed in mice carrying the conditional lung epithelial Hoxa5 deletion, indicating some bias due to Cre deleterious effects. Excessive apoptosis, likely due to Cre toxicity, could explain the abnormal cysts. Our findings illustrate the need for appropriate control experiments and careful interpretation of data to discriminate between the phenotype due to the targeted mutation and the confounding effects of the Cre recombinase. genesis 49:152‐159, 2011. © 2011 Wiley‐Liss, Inc.