Glomerular disease is one of the most common causes of end-stage renal failure. Increasing evidence suggests that these glomerulopathies are frequently caused by primary lesions in the renal podocytes. One of the major consequences of podocyte lesions is the accumulation of mesangial matrix in the glomerular basement membrane, a process called glomerulosclerosis. Mesangial sclerosis is one of the most consistent findings in Denys-Drash patients and can be caused by dominant mutations in the Wilms' tumor 1 gene (WT1). The underlying mechanism, however, is poorly understood. WT1 is expressed in the podocytes throughout life, but its function in this cell type is unknown. Combining Wt1-knockout and inducible yeast artificial chromosome transgenic mouse models, we demonstrate that reduced expression levels of WT1 result in either crescentic glomerulonephritis or mesangial sclerosis depending on the gene dosage. Strikingly, the two podocyte-specific genes nphs1 and podocalyxin are dramatically downregulated in mice with decreased levels of Wt1, suggesting that these two genes act downstream of Wt1. Taken together, our data provide genetic evidence that reduced levels of Wt1 are responsible for the pathogenesis of two distinct renal diseases and offer a molecular explanation for the increased occurrence of glomerulosclerosis in patients with WAGR syndrome.