Monogenic lung diseases that are caused by mutations in surfactant genes of the pulmonary epithelium are marked by perinatal lethal respiratory failure or chronic diffuse parenchymal lung disease with few therapeutic options. Using a CRISPR fluorescent reporter system, we demonstrate that precisely timed in utero intra-amniotic delivery of CRISPR-Cas9 gene editing reagents during fetal development results in targeted and specific gene editing in fetal lungs. Pulmonary epithelial cells are predominantly targeted in this approach, with alveolar type 1, alveolar type 2, and airway secretory cells exhibiting high and persistent gene editing. We then used this in utero technique to evaluate a therapeutic approach to reduce the severity of the lethal interstitial lung disease observed in a mouse model of the human SFTPC^I73T mutation. Embryonic expression of Sftpc^I73T alleles is characterized by severe diffuse parenchymal lung damage and rapid demise of mutant mice at birth. After in utero CRISPR-Cas9–mediated inactivation of the mutant Sftpc^I73T gene, fetuses and postnatal mice showed improved lung morphology and increased survival. These proof-of-concept studies demonstrate that in utero gene editing is a promising approach for treatment and rescue of monogenic lung diseases that are lethal at birth.