Differentiation of metanephric mesenchyme is triggered by an inductive signal(s) from the epithelial ureteric bud. As a result of this induction, most of the metanephric mesenchyme converts into epithelium of a nephron. We have developed and characterized an explant culture system, in which metanephric mesenchyme can grow and completely differentiate in vitro in the absence of an inductive tissue. When separated 13 dpc rat metanephric mesenchymes were cultured in serum-free conditioned medium from a rat ureteric bud cell line (RUB1) in the presence of bFGF and TGFalpha, they were induced to differentiate into nephron epithelia and glomeruli-like structures. The nephric type of differentiation was confirmed by both morphological and molecular criteria and paralleled the developmental changes of nephron differentiation in vivo. Expression patterns of brush-border antigen as well as molecular markers of kidney differentiation Wt1, Lim1, Hgf and c-met, c-ret, Shh, Wnt4, Wnt7b, and Wnt11 were analyzed in explants by whole mount and tissue section in situ hybridization following 1-9 days in culture. The expression of secreted patterning molecules Bmp7 and Wnt7b, but not Shh or Wnt11, were demonstrated by RT-PCR and northern blot hybridization with RNA from the RUB1 cells. Our culture system lends itself to examining the relevance of these and other signaling molecules required for nephron differentiation.