A crucial evolutionary change in vertebrate history was the Palaeozoic (Devonian 419–359 million years ago) water-to-land transition, allowed by key morphological and physiological modifications including the acquisition of lungs. Nonetheless, the origin and early evolution of vertebrate lungs remain highly controversial, particularly whether the ancestral state was paired or unpaired. Due to the rarity of fossil soft tissue preservation, lung evolution can only be traced based on the extant phylogenetic bracket. Here we investigate, for the first time, lung morphology in extensive developmental series of key living lunged osteichthyans using synchrotron x-ray microtomography and histology. Our results shed light on the primitive state of vertebrate lungs as unpaired, evolving to be truly paired in the lineage towards the tetrapods. The water-to-land transition confronted profound physiological challenges and paired lungs were decisive for increasing the surface area and the pulmonary compliance and volume, especially during the air-breathing on land.