Mice which are homozygous for the limb deformity (ld) mutation also manifest an incompletely penetrant unilateral or bilateral renal agenesis phenotype. Intercross experiments suggest that the differences in penetrance of the renal agenesis phenotype between homozygous mice with different ld alleles are due to intrinsic differences in the strength of the mutant alleles or to one or more closely linked modifying loci, and not to generalized differences in genetic background. Analysis of ld/ld embryos between embryonic days 11-13 reveals delayed outgrowth or complete absence of the ureteric bud, the inducer of metanephric mesenchyme. Since explants of ld/ld metanephric mesenchyme differentiate in culture when apposed to embryonic spinal cord, we conclude that deficient ureteric bud outgrowth is the morphologic basis for renal agenesis in ld/ld mice. However, since ld transcripts can be detected in both metanephric mesenchyme and ureteric bud, the molecular basis for the deficiency in ureteric bud outgrowth could reside in either component.