Kidney tubules develop by a mesenchyme-epithelium transition, normally induced by ureteric bud through a mechanism that remains obscure. Murine nephrogenesis in vitro has always required heterologous inducing cells. We have discovered that Li+ can elicit the early stages of epithelial differentiation in isolated nephrogenic mesenchyme. We have made detailed comparisons of the timing of morphoregulatory molecule expression between Li(+)-mediated induction and the traditional in vitro method using induction by spinal cord. Both followed the same program of early morphoregulatory molecule expression, though Li(+)-induced samples failed to progress into the later parts of the nephrogenic process. Mesenchymes induced by Li+ showed more DNA synthesis than controls, though less than those induced by spinal cord. Discovery of a chemical means to activate differentiation in the absence of heterologous tissue offers a new basis for studying molecular mechanisms regulating the early events of nephrogenesis, as well as for investigating transduction of inductive signals that initiate the process.