The AP-1 transcription factor, composed of Jun and Fos proteins, plays a crucial role in the fine tuning of cell proliferation. We showed previously that AP-1 complexes are activated during the proliferative response that parallels the development of renal lesions after nephron reduction, but little is known about the specific role of individual Jun/Fos components in the deterioration process. Here we used JunD knockout (JunD-/-) mice and an experimental model of chronic renal injury (75% nephron reduction) to explore the role of JunD. Nephron reduction resulted in an initial compensatory growth phase that did not require JunD. JunD, however, was essential to inhibit a second wave of cell proliferation and to halt the development of severe glomerular sclerosis, tubular dilation, and interstitial fibrosis. We show that the effects of junD inactivation are not cell autonomous and involve upregulation of the paracrine mitogen, TGF-alpha. Expression of a transgene (REM) encoding a dominant negative isoform of the EGFR, the receptor for TGF-alpha, prevented the second wave of cell proliferation and the development of renal lesions in bitransgenic JunD-/-/REM mice. We propose that JunD is part of a regulatory network that controls proliferation to prevent pathological progression in chronic renal diseases.