Key to understanding the evolutionary origin and modification of phenotypic traits is revealing the underlying developmental genetic mechanisms. An important morphological trait of ray-finned fishes is the gas bladder, an air-filled organ that, in most fishes, functions for buoyancy control, and is homologous to the lungs of lobe-finned fishes. While gas bladders and lungs are similar in many ways, the distinguishing morphological difference between these organs is the general direction of budding from the foregut during development. Lungs bud ventrally and the gas bladder buds dorsally from the foregut endoderm. To compare lung and gasbladder development, the relevant taxa include bichir and bowfin. Bichir are the only living ray-finned fish that develops ventrally budding lungs. Bowfin, an early-diverging lineage, sister to teleosts, develops a gas bladder and exhibits a number of ancestral characteristics. Additionally, we included zebrafish as a representative of teleost fishes. I investigated the genetic underpinnings of this ventral-to-dorsal shift in budding direction using immunohistochemistry and RNA sequencing to determine whether gene expression patterns show a dorsoventral inversion paralleling the morphological inversion in budding direction. I also characterize morphological budding direction in bowfin, a purported transitional form, using nano-CT scanning. Taken together, the results of our gene expression and morphological studies of gasbladder development suggest that the inversion and modification of expression patterns of an ancestral lung-gene network underlies the evolution of a dorsal gas bladder from ventral lungs. The bowfin gas bladder does indeed bud dorsally from the foregut and does not represent an intermediate, laterally-budding morphology between ventral lungs and a dorsal gas bladder. We suggest that a regulatory change producing the dorsoventral inversion of expression of Tbx5, a known lung-regulatory gene, in the foregut during gasbladder development could facilitate the inversion of expression of downstream genes, such as Tbx4, Wnt2, Fgf10, and Bmp-signaling. Furthermore, this gene network may have been modified during the evolution of the gas bladder leading to the expression of Bmp16, rather than the orthologous Bmp4, to regulate gasbladder development in ray-finned fishes. Changes in the timing and spatial expression of lung-regulatory genes appear to induce the dorsal budding of the gas bladder during development.