The mammalian kidney develops from a simple epithelial bud to an arborized network of tubules, which are fated to form the ureter, renal pelvis and collecting ducts. This process of ductal elaboration is achieved through an ancient developmental mechanism known as branching morphogenesis that is widely employed in glandular organs, the vasculature and lungs. It breaks up large solid tissues facilitating secretion, excretion and gas exchange, depending on the tissue. In the kidney, growth of the ureteric bud is driven by interactions between progenitor cells in the tips of the epithelial tree and their mesenchymal 'caps'. The cells of the cap mesenchyme give rise to nephrons; therefore, the interaction between these two cell populations is likely to be a critical driver of nephron number, which is determined during gestation. These cellular interactions are potentially affected by genetic mutations (congenital kidney diseases) and by changes in the fetal environment. Understanding the aetiology of congenital and acquired kidney diseases therefore requires a full appreciation of the processes involved in establishing the cellular architecture of the kidney and of the factors that affect the commitment of progenitor cells to form nephrons.