Despite the high prevalence and poor outcome of patients with metastatic lung cancer the mechanisms of tumour progression and metastasis remain largely uncharacterized. Here we modelled human lung adenocarcinoma, which frequently harbours activating point mutations in KRAS and inactivation of the p53 pathway, using conditional alleles in mice. Lentiviral-mediated somatic activation of oncogenic Kras and deletion of p53 in the lung epithelial cells of Kras(LSL-G12D/+);p53(flox/flox) mice initiates lung adenocarcinoma development. Although tumours are initiated synchronously by defined genetic alterations, only a subset becomes malignant, indicating that disease progression requires additional alterations. Identification of the lentiviral integration sites allowed us to distinguish metastatic from non-metastatic tumours and determine the gene expression alterations that distinguish these tumour types. Cross-species analysis identified the NK2-related homeobox transcription factor Nkx2-1 (also called Ttf-1 or Titf1) as a candidate suppressor of malignant progression. In this mouse model, Nkx2-1 negativity is pathognomonic of high-grade poorly differentiated tumours. Gain- and loss-of-function experiments in cells derived from metastatic and non-metastatic tumours demonstrated that Nkx2-1 controls tumour differentiation and limits metastatic potential in vivo. Interrogation of Nkx2-1-regulated genes, analysis of tumours at defined developmental stages, and functional complementation experiments indicate that Nkx2-1 constrains tumours in part by repressing the embryonically restricted chromatin regulator Hmga2. Whereas focal amplification of NKX2-1 in a fraction of human lung adenocarcinomas has focused attention on its oncogenic function, our data specifically link Nkx2-1 downregulation to loss of differentiation, enhanced tumour seeding ability and increased metastatic proclivity. Thus, the oncogenic and suppressive functions of Nkx2-1 in the same tumour type substantiate its role as a dual function lineage factor.