Squamous cell carcinoma accounts for 20% of all human lung cancers and is strongly linked to cigarette smoking. It develops through premalignant changes that are characterized by high levels of keratin 14 (K14) expression in the airway epithelium and evolve through basal cell hyperplasia, squamous metaplasia and dysplasia to carcinoma in situ and invasive carcinoma. In order to explore the impact of K14 in the pulmonary epithelium that normally lacks both squamous differentiation and K14 expression, human keratin 14 gene hK14 was constitutively expressed in mouse airway progenitor cells using a mouse Clara cell specific 10 kDa protein (CC10) promoter. While the lungs of CC10-hK14 transgenic mice developed normally, we detected increased expression of K14 and the molecular markers of squamous differentiation program such as involucrin, loricrin, small proline-rich protein 1A, transglutaminase 1 and cholesterol sulfotransferase 2B1. In contrast, wild-type lungs were negative. Aging CC10-hK14 mice revealed multifocal airway cell hyperplasia, occasional squamous metaplasia and their lung tumors displayed evidence for multidirectional differentiation. We conclude that constitutive expression of hK14 initiates squamous differentiation program in the mouse lung, but fails to promote squamous maturation. Our study provides a novel model for assessing the mechanisms of premalignant lesions in vivo by modifying differentiation and proliferation of airway progenitor cells.