Long noncoding RNAs (lncRNAs) are thought to play important roles in regulating gene transcription, but few have well-defined expression patterns or known biological functions during mammalian development. Using a conservative pipeline to identify lncRNAs that have important biological functions, we identified 363 lncRNAs in the lung and foregut endoderm. Importantly, we show that these lncRNAs are spatially correlated with transcription factors across the genome. In-depth expression analyses of lncRNAs with genomic loci adjacent to the critical transcription factors Nkx2.1, Gata6, Foxa2 (forkhead box a2), and Foxf1 mimic the expression patterns of their protein-coding neighbor. Loss-of-function analysis demonstrates that two lncRNAs, LL18/NANCI (Nkx2.1-associated noncoding intergenic RNA) and LL34, play distinct roles in endoderm development by controlling expression of critical developmental transcription factors and pathways, including retinoic acid signaling. In particular, we show that LL18/NANCI acts upstream of Nkx2.1 and downstream from Wnt signaling to regulate lung endoderm gene expression. These studies reveal that lncRNAs play an important role in foregut and lung endoderm development by regulating multiple aspects of gene transcription, often through regulation of transcription factor expression.