We investigated the development and morphogenesis of stem cells cloned from cultured transformed collecting duct cells of the rabbit in the presence of hepatocyte growth factor/scatter factor (HGF), vitamin A, laminin and transforming growth factors, HGF and vitamin A induced peanut agglutinin (PNA) positivity in nonprincipal cells (PC) but not in PCs, only HGF induced tubule formation. Although HGF induced a tubule-like arrangement in both cell lines, tubules with PNA-positive cells were observed only in non-PC cells incubated with HGF. Vasopressin increased intracellular free calcium in PNA-negative cells but not in PNA-positive cells. Intracellular pH increased in PNA-positive cells but not in PNA-negative cells when gluconate was substituted for Cl in the buffer. Cloned non-PCs were stem cells that developed PC- and IC-like characteristics and formed collecting ducts when incubated with HGF.