The kidney has been widely exploited as a model system for the study of tissue inductions regulating vertebrate organogenesis. Kidney development is initiated by the ingrowth of the Wolfian duct-derived ureteric bud into the presumptive kidney mesenchyme. In response to a signal from the ureter, mesenchymal cells condense, aggregate into pretubular clusters and undergo an epithelial conversion generating a simple tubule. This then undergoes morphogenesis and is transformed into the excretory system of the kidney, the nephron. We report here that the expression of Wnt-4, which encodes a secreted glycoprotein, correlates with, and is required for, kidney tubulogenesis. Mice lacking Wnt-4 activity fail to form pretubular cell aggregates; however, other aspects of mesenchymal and ureteric development are unaffected. Thus, Wnt-4 appears to act as an autoinducer of the mesenchyme to epithelial transition that underlies nephron development.