Establishment of a functional whole kidney de novo has not received much attention because of the formidable challenges and the slow pace of advances in this field of research. This situation has changed recently with publication of data revealing the catastrophic nature of Medicaid costs for dialysis-related diseases. An innovative approach is needed in our search for therapies for kidney diseases and to provide a substitute for dialysis as soon as possible. Regenerative medicine offers great hope for realizing this goal. We established a system by which human mesenchymal stem cells can differentiate into a functional renal unit using a program of nephrogenesis in a developing xeno-embryo. In this article, recent research in the field of developing whole kidneys is reviewed, and possible therapeutic applications for kidney diseases are proposed in combination with our knowledge of the emerging field of kidney stem cell biology.