We have purified a protein present in a conditioned medium derived from the metanephric mesenchyme that supports non-branching growth and epithelial differentiation of the isolated ureteric bud (UB) independent of glial cell line-derived neurotrophic growth factor (GDNF). By sequential liquid chromatography, together with protein microsequencing, the protein was identified as heregulin (HRG)alpha. The addition of recombinant HRG to the isolated UB grown in three-dimensional culture confirmed the proliferative activity of HRG. In branching UBs induced by whole metanephric mesenchyme cell-conditioned medium, proliferating cells were localized at ampullae, where a binding receptor for GDNF, GFRalpha1, was found. In HRG-induced UBs, however, the expression of GFRalpha1 was down-regulated, and proliferating cells were distributed throughout the structure. Electron microscopic examination of the HRG-induced UB revealed the presence of structurally mature and polarized epithelial cells reminiscent of the epithelial cells found in the stalk portion of the branching UB. cDNA array analysis further revealed that genes ontologically classified as developmental were down-regulated by HRG, whereas those involved in transport were up-regulated. For example, the mRNA for the GDNF receptors, GFRalpha1 and ret9, was down-regulated, whereas the mRNA for collecting duct transporters, such as urea transporter2, aquaporin3, and sodium-hydrogen exchanger2 was up-regulated in HRG-treated UBs compared with UBs grown in the presence of branch-promoting factors. Moreover, HRG promoted growth of UBs cultured in the absence of GDNF. Taken together, the data suggest that HRG supports UB epithelial cell differentiation and non-GDNF-dependent growth, raising the possibility that this kind of activity plays a role in the growth and differentiation of the stalk portion of the branching epithelial UB.