Abstract Background Alveologenesis is the final stage of lung development to form air-exchanging units between alveoli and blood vessels. Genetic susceptibility or hyperoxic stress to perturb this complicated process can cause abnormal enlargement of alveoli and lead to bronchopulmonary dysplasia (BPD)-associated emphysema. Platelet-derived growth factor receptor α (PDGFRα) signaling is crucial for alveolar myofibroblast (MYF) proliferation and its deficiency is associated with risk of BPD, but posttranscriptional mechanisms regulating PDGFRα synthesis during lung development remain largely unexplored. Cytoplasmic polyadenylation element-binding protein 2 (CPEB2) is a sequence-specific RNA-binding protein and translational regulator. Because CPEB2-knockout (KO) mice showed emphysematous phenotypes, we investigated how CPEB2-controlled translation affects pulmonary development and function. Methods Respiratory and pulmonary functions were measured by whole-body and invasive plethysmography. Histological staining and immunohistochemistry were used to analyze morphology, proliferation, apoptosis and cell densities from postnatal to adult lungs. Western blotting, RNA-immunoprecipitation, reporter assay, primary MYF culture and ectopic expression rescue were performed to demonstrate the role of CPEB2 in PDGFRα mRNA translation and MYF proliferation. Results Adult CPEB2-KO mice showed emphysema-like dysfunction. The alveolar structure in CPEB2-deficient lungs appeared normal at birth but became simplified through the alveolar stage of lung development. In CPEB2-null mice, we found reduced proliferation of MYF progenitors during alveolarization, abnormal deposition of elastin and failure of alveolar septum formation, thereby leading to enlarged pulmonary alveoli. We identified that CPEB2 promoted PDGFRα mRNA translation in MYF progenitors and this positive regulation could be disrupted by H2O2, a hyperoxia-mimetic treatment. Moreover, decreased proliferating ability in KO MYFs due to insufficient PDGFRα expression was rescued by ectopic expression of CPEB2, suggesting an important role of CPEB2 in upregulating PDGFRα signaling for pulmonary alveologenesis. Conclusions CPEB2-controlled translation, in part through promoting PDGFRα expression, is indispensable for lung development and function. Since defective pulmonary PDGFR signaling is a key feature of human BPD, CPEB2 may be a risk factor for BPD.