The developing metanephric kidney is a convenient model to study molecular events associated with epithelial cell differentiation. To determine the genes involved in the defining event of this process, namely, the conversion of metanephric mesenchyme to the epithelium of the nephron, we applied differential display (DD) techniques. Explants of rat metanephric mesenchymes were induced to condense ex vivo with fibroblast growth factor 2 (FGF2) or to form tubules with FGF2 and conditioned medium (CM) from a cell line (RUB1) of ureteric bud, the renal inductive tissue. Three time points (6, 24, and 72 h) were chosen to track the dynamics of gene expression during morphogenesis. Seventy-two up- or down-regulated mRNAs were identified, including 36 novel sequences and those of cell cycle regulatory proteins (TGF-beta2, Cyclin D1, p57Kip2), transcription factors (beta-catenin, Sox11, DP1), signaling proteins (SH3-domain binding protein, G-protein-coupled receptor, Ser-Thr protein kinase), cell adhesion molecules (syndecan-4, integrin-beta1), and also gene33, H19, SM20, IGFBP5, MAMA receptor, lectin, keratin, beta-tubulin, calreticulin, GRP78, ERp72, MnSoD, thioredoxin, and others. Some have previously been associated with kidney development and serve as good controls for expected changes, while most have not been linked with kidney epithelial cell differentiation. Using thin sections of embryonic kidney and labeled antisense RNA probes, we applied RNA hybridization to confirm the results of DD and related the expression of these genes to specific cell lineages of the developing kidney. These results provide a window into the events that mediate this critical differentiation process and suggest that a limited number of interrelated events direct the epithelial conversion of metanephric mesenchyme. genesis 27:22-31, 2000. Published 2000 Wiley-Liss, Inc.