This paper reports 3-dimensional confocal microscopy observations on how nephrogenic aggregates form from the NCAM- and Pax2-positive caps (4-5 cells deep) of condensed metanephric mesenchyme surrounding the duct tips of the mouse kidney. Aggregates of 6-8 cells are first seen at approximately E12.5-12.75 immediately proximal to this cap, closely abutting the duct surface. As the tip advances, NCAM expression is maintained in the cap but is otherwise restricted to aggregates whose cells rapidly epithelialise, forming tubules that invade the duct epithelium. Pax2 expression studies shows how the rind of nephrogenic blastemal cells forms: as duct tips extend towards the kidney surface, the associated Pax2+ cells form patches of cells on the kidney surface. These observations revise our knowledge of the timing and process of nephron initiation.