PAX2 mutations cause renal-coloboma syndrome (RCS), a rare multi-system developmental abnormality involving optic nerve colobomas and renal abnormalities. End-stage renal failure is common in RCS, but the mechanism by which PAX2 mutations lead to renal failure is unknown. PAX2 is a member of a family of developmental genes containing a highly conserved 'paired box' DNA-binding domain, and encodes a transcription factor expressed primarily during fetal development in the central nervous system, eye, ear and urogenital tract. Presently, the role of PAX2 during kidney development is poorly understood. To gain insight into the cause of renal abnormalities in patients with PAX2 mutations, kidney anomalies were analyzed in patients with RCS, including a large Brazilian kindred in whom a new PAX2 mutation was identified. In a total of 29 patients, renal hypoplasia was the most common congenital renal abnormality. To determine the direct effects of PAX2 mutations on kidney development fetal kidneys of mice carrying a Pax2 (1Neu)mutation were examined. At E15, heterozygous mutant kidneys were approximately 60% of the size of wild-type littermates, and the number of nephrons was strikingly reduced. Heterozygous 1Neu mice showed increased apoptotic cell death during fetal kidney development, but the increased apoptosis was not associated with random stochastic inactivation of Pax2 expression in mutant kidneys; Pax2 was shown to be biallelically expressed during kidney development. These findings support the notion that heterozygous mutations of PAX2 are associated with increased apoptosis and reduced branching of the ureteric bud, due to reduced PAX2 dosage during a critical window in kidney development.