During kidney development, unknown signals derived from the ureteric bud induce metanephric mesenchymal cells to differentiate into nephron epithelia. In addition to the ureteric bud, a number of other tissues can act as heterologous inducers of this process in vitro, including embryonic spinal cord. In this report we demonstrate that Wnt-1, a gene that encodes a secreted glycoprotein expressed in embryonic spinal cord, is capable of conferring nephron-inducing activity to fibroblast cell lines. When cocultured with cells expressing exogenous Wnt-1, metanephric mesenchyme differentiated into glomerular and renal tubular epithelia. No such effect was observed using control cells. These data imply that the ability of embryonic spinal cord to act as an inducer of nephrogenesis may result from its production of Wnt-1 protein and suggest that a member of the Wnt gene family may be a mediator of renal epithelial morphogenesis in vivo.