The canonical WNT signaling pathway plays a crucial role in patterning of the embryo during development, but little is known about the specific developmental events which are under WNT control. To understand more about how the WNT pathway orchestrates mammalian organogenesis, we studied the canonical beta-catenin-mediated WNT signaling pathway in kidneys of mice bearing a beta-catenin-responsive TCF/betaGal reporter transgene. In metanephric kidney, intense canonical WNT signaling was evident in epithelia of the branching ureteric bud and in nephrogenic mesenchyme during its transition into renal tubules. WNT signaling activity is rapidly downregulated in maturing nephrons and becomes undetectable in postnatal kidney. Sites of TCF/betaGal activity are in proximity to the known sites of renal WNT2b and WNT4 expression, and these WNTs stimulate TCF reporter activity in kidney cell lines derived from ureteric bud and metanephric mesenchyme lineages. When fetal kidney explants from HoxB7/GFP mice were exposed to the canonical WNT signaling pathway inhibitor, Dickkopf-1, arborization of the ureteric bud was significantly reduced. We conclude that restricted zones of intense canonical WNT signaling drive branching nephrogenesis in fetal kidney.