Many studies have investigated the source and role of epithelial progenitors during lung development; such information is limited for fibroblast populations and their complex role in the developing lung. In this study, we characterized the spatial location, mRNA expression and Immunophenotyping of PDGFRα⁺ fibroblasts during sacculation and alveolarization. Confocal microscopy identified spatial association of PDGFRα expressing fibroblasts with proximal epithelial cells of the branching bronchioles and the dilating acinar tubules at E16.5; with distal terminal saccules at E18.5; and with alveolar epithelial cells at PN7 and PN28. Immunohistochemistry for alpha smooth muscle actin revealed that PDGFRα⁺ fibroblasts contribute to proximal peribronchiolar smooth muscle at E16.5 and to transient distal alveolar myofibroblasts at PN7. Time series RNA-Seq analyses of PDGFRα⁺ fibroblasts identified differentially expressed genes that, based on gene expression similarity were clustered into 7 major gene expression profile patterns. The presence of myofibroblast and smooth muscle precursors at E16.5 and PN7 was reflected by a two-peak gene expression profile on these days and gene ontology enrichment in muscle contraction. Additional molecular and functional differences between peribronchiolar smooth muscle cells at E16.5 and transient intraseptal myofibroblasts at PN7 were suggested by a single peak in gene expression at PN7 with functional enrichment in cell projection and muscle cell differentiation. Immunophenotyping of subsets of PDGFRα⁺ fibroblasts by flow cytometry confirmed the predicted increase in proliferation at E16.5 and PN7, and identified subsets of CD29⁺ myofibroblasts and CD34⁺ lipofibroblasts. These data can be further mined to develop novel hypotheses and valuable understanding of the molecular and cellular basis of alveolarization.