Conversion of renal mesenchyme into epithelia depends on the ureteric bud, but its specific actions are not established. From conditioned media of ureteric bud cells, we have identified molecules that mimic the growth and epithelialization of mesenchyme in vivo. LIF targets late epithelial progenitors surrounding the ureteric bud, and in combination with survival factors, converts them into nephrons. In contrast, 24p3/Ngal targets early progenitors at the kidney's periphery through an iron-mediated, but a transferrin-independent mechanism. Hence, the ureteric bud controls many steps of cell conversion. A genome wide search for ureteric bud-specific molecules will identify additional pathways that induce morphogenesis.