With every breath, the dynamically changing mechanical pressures must work in unison with the cells and soft tissue structures of the lung to permit air to efficiently traverse the airway tree and undergo gas exchange in the alveoli. The influence of mechanics on cell and tissue function is becoming apparent, raising the question: how does the airway tree co-exist within its mechanical environment to maintain normal cell function throughout its branching structure of diminishing dimensions? We introduce a new mechanical design principle for the conducting airway tree in which mechanotransduction at the level of cells is driven to orchestrate airway wall structural changes that can best maintain a preferred mechanical microenvironment. To support this principle, we report in vitro radius-transmural pressure relations for a range of airway radii obtained from healthy bovine lungs and model the data using a strain energy function together with a thick-walled cylinder description. From this framework, we estimate circumferential stresses and incremental Youngs moduli throughout the airway tree. Our results indicate that the conducting airways consistently operate within a preferred mechanical homeostatic state, termed mechanical homeostasis, that is characterized by a narrow range of circumferential stresses and Youngs moduli. This mechanical homeostatic state is maintained for all airways throughout the tree via airway wall dimensional and mechanical relationships. As a consequence, cells within the airway walls throughout the airway tree experience similar oscillatory strains during breathing that are much smaller than previously thought. Finally, we discuss the potential implications of how the maintenance of mechanical homeostasis, while facilitating healthy tissue-level alterations necessary for maturation, may lead to airway wall structural changes capable of chronic asthma.