Development of a branching tree in the embryonic lung is crucial for the formation of a fully mature functional lung at birth. Sox9+ cells present at the tip of the primary embryonic lung endoderm are multipotent cells responsible for branch formation and elongation. We performed a genetic screen in murine primary cells and identified aurora kinase b (Aurkb) as an essential regulator of Sox9+ cells ex vivo. In vivo conditional knockout studies confirmed that Aurkb was required for lung development but was not necessary for postnatal growth and the repair of the adult lung after injury. Deletion of Aurkb in embryonic Sox9+ cells led to the formation of a stunted lung that retained the expression of Sox2 in the proximal airways, as well as Sox9 in the distal tips. Although we found no change in cell polarity, we showed that loss of Aurkb or chemical inhibition of Aurkb caused Sox9+ cells to arrest at G2/M, likely responsible for the lack of branch bifurcation. This work demonstrates the power of genetic screens in identifying novel regulators of Sox9+ progenitor cells and lung branching morphogenesis.