The tyrosine kinase receptor Ret is expressed in the ureteric bud and is required for normal renal development. Constitutive loss of Ret, its co-receptor gfralpha-1, or the ligand glial cell line-derived neurotrophic factor results in renal agenesis. Transgenic embryos that express a constitutively active form of Ret (Ret(MEN2B)) under the control of the dopamine-beta-hydroxylase (DbetaH) promoter develop profound neuroglial hyperplasia of their sympathetic ganglia and adrenal medullae. Embryos from two independent DbetaH-Ret(MEN2B)-transgenic lines exhibit renal malformations. In contrast with ret-/- embryos, renal maldevelopment in DbetaH-Ret(MEN2B)-transgenic embryos results from primary changes in sympathoadrenal organs extrinsic to the kidney. The ureteric bud invades the metanephric mesenchyme normally, but subsequent bud branching and nephrogenesis are retarded, resulting in severe renal hypoplasia. Ablation of sympathoadrenal precursors restores normal renal growth in vivo and in vitro. We postulate that disruption of renal development results because Ret(MEN2B) derived from the hyperplastic nervous tissue competes with endogenous renal Ret for gfralpha-1 or other signaling components. This hypothesis is supported by the observation that renal malformations, which do not normally occur in a transgenic line with low levels of DbetaH-Ret(MEN2B) expression, arise in a gdnf+/- background. However, renal maldevelopment was not recapitulated in kidneys that were co-cultured with explanted transgenic ganglia in vitro. Our observations illustrate a novel pathogenic mechanism for renal dysgenesis that may explain how putative activating mutations of the RET gene can produce a phenotype usually associated with RET deficiency.