Pleuropulmonary blastoma (PPB) is a rare pediatric lung neoplasm that recapitulates developmental pathways of early embryonic lungs. As lung development proceeds with highly regulated mesenchymal-epithelial interactions, a DICER1 mutation in PPB generates a faulty lung differentiation program with resultant biphasic tumors composed of a primitive epithelial and mesenchymal stroma with early progenitor blastomatous cells. Deciphering of PPB progression has been hampered by the difficulty of culturing PPB cells, and specifically progenitor blastomatous cells. Here, we show that in contrast with in-vitro culture, establishment of PPB patient-derived xenograft (PDX) in NOD-SCID mice selects for highly proliferating progenitor blastoma overexpressing critical regulators of lung development and multiple imprinted genes. These stem-like tumors were sequentially interrogated by gene profiling to show a FGF module that is activated alongside Neural cell adhesion molecule 1 (NCAM1). Targeting the progenitor blastoma and these transitions with an anti-NCAM1 immunoconjugate (Lorvotuzumab mertansine) inhibited tumor growth and progression providing new paradigms for PPB therapeutics. Altogether, our novel in-vivo PPB xenograft model allowed us to enrich for highly proliferating stem-like cells and to identify FGFR and NCAM1 as two key players that can serve as therapeutic targets in this poorly understood and aggressive disease.