A functional, developmental, and comparative biological approach is probably the most effective way for arranging gene regulatory networks (GRNs) in their biological contexts. Evolutionary developmental biology allows comparison of GRNs during development across phyla. For lung evolution, the parathyroid hormone-related protein (PTHrP) GRN exemplifies a continuum from ontogeny to phylogeny, homeostasis, and repair. PTHrP signaling between the lung endoderm and mesoderm stimulates lipofibroblast differentiation by downregulating the myofibroblast Wnt signaling pathway and upregulating the protein kinase A-dependent cAMP signaling pathway, inducing the lipofibroblast phenotype. Leptin secreted by the lipofibroblast, in turn, binds to its receptor on the alveolar type II cell, stimulating surfactant synthesis to ensure alveolar homeostasis. Failure of the PTHrP/PTHrP receptor signaling mechanism causes transdifferentiation of lipofibroblasts to myofibroblasts, which are the hallmark for lung fibrosis. We have shown that by targeting peroxisome proliferator-activated receptor gamma, the downstream target for lipofibroblast PTHrP signaling, we can prevent lung fibrosis. We speculate that the recapitulation of the myofibroblast phenotype during transdifferentiation is consistent with lung injury as lung evolution in reverse. Repair recapitulates ontogeny because it is programmed to express the cross talk between epithelium and mesoderm through evolution. This model demonstrates how epithelial-mesenchymal cross talk, when seen as a recapitulation of ontogeny and phylogeny (in both a forward and reverse direction), predicts novel, effective diagnostic and therapeutic targets.