Constitutive loss of transcription factor GATA-2 leads to embryonic lethality from primitive erythropoietic failure. We serendipitously discovered an essential contribution of GATA-2 to urogenital development when the hematopoietic deficiency of Gata2 null mutant animals was complemented by a Gata2 yeast artificial chromosome (YAC) transgene; these mice died from a perinatal lethal urogenital abnormality. Here, we report the generation and analysis of Gata2 hypomorphic mutant (Gata2(fGN)/(/fGN)) mice, which suffered from hydronephrosis and megaureter, as do the YAC-rescued Gata2 null mutants. Gata2(fGN)/(/fGN) mutants exhibit anteriorly displaced ureteric budding from the Wolffian duct as well as reduced BMP4 expression in the intermediate mesoderm derivatives in a manner that is temporally coincident with ureteric bud emergence. In Bmp4 mutant heterozygotes, rostral displacement of the initial bud site on the Wolffian duct results in abnormal urogenital development. We show here that Bmp4 mRNA is reduced approximately twofold in Gata2(fGN)/(/fGN) mice (as in Bmp4 null heterozygotes), and that GATA-2 trans-activates a Bmp4 first intron element-directed reporter plasmid in co-transfection assays. These experiments taken together implicate GATA-2 as a direct regulator of Bmp4 transcription. The pathophysiology described in Gata2 hypomorphic mutant animals resembles human congenital anomalies of the kidney and urinary tract.