A number of inflammatory lung diseases, including chronic obstructive pulmonary disease, idiopathic pulmonary fibrosis, and pneumonia, are modulated by WNT/β-catenin signaling. However, the underlying molecular mechanisms remain unclear. Here, starting with a forward genetic screen in mouse, we identify the WNT coreceptor Related to receptor tyrosine kinase (RYK) acting in mesenchymal tissues as a cell survival and antiinflammatory modulator. Ryk mutant mice exhibit lung hypoplasia and inflammation as well as alveolar simplification due to defective secondary septation, and deletion of Ryk specifically in mesenchymal cells also leads to these phenotypes. By analyzing the transcriptome of wild-type and mutant lungs, we observed the up-regulation of proapoptotic and inflammatory genes whose expression can be repressed by WNT/RYK signaling in vitro. Moreover, mesenchymal Ryk deletion at postnatal and adult stages can also lead to lung inflammation, thus indicating a continued role for WNT/RYK signaling in homeostasis. Our results indicate that RYK signaling through β-catenin and Nuclear Factor kappa B (NF-κB) is part of a safeguard mechanism against mesenchymal cell death, excessive inflammatory cytokine production, and inflammatory cell recruitment and accumulation. Notably, RYK expression is down-regulated in the stromal cells of pneumonitis patient lungs. Altogether, our data reveal that RYK signaling plays critical roles as an antiinflammatory modulator during lung development and homeostasis and provide an animal model to further investigate the etiology of, and therapeutic approaches to, inflammatory lung diseases.