The cell cycle must be tightly coordinated for proper control of embryonic development and for the long-term maintenance of organs such as the lung. There is emerging evidence that Kinesin family member 7 (Kif7) promotes Hedgehog (Hh) signaling during embryonic development, and its misregulation contributes to diseases such as ciliopathies and cancer. Kif7 encodes a microtubule interacting protein that controls Hh signaling through regulation of microtubule dynamics within the primary cilium. However, whether Kif7 has a function in nonciliated cells remains largely unknown. The role Kif7 plays in basic cell biological processes like cell proliferation or cell cycle progression also remains to be elucidated. Here, we show that Kif7 is required for coordination of the cell cycle, and inactivation of this gene leads to increased cell proliferation in vivo and in vitro. Immunostaining and transmission electron microscopy experiments show that Kif7dda/dda mutant lungs are hyperproliferative and exhibit reduced alveolar epithelial cell differentiation. KIF7 depleted C3H10T1/2 fibroblasts and Kif7dda/dda mutant mouse embryonic fibroblasts have increased growth rates at high cellular densities, suggesting that Kif7 may function as a general regulator of cellular proliferation. We ascertained that in G1, Kif7 and microtubule dynamics regulate the expression and activity of several components of the cell cycle machinery known to control entry into S phase. Our data suggest that Kif7 may function to regulate the maintenance of the respiratory airway architecture by controlling cellular density, cell proliferation, and cycle exit through its role as a microtubule associated protein.