Organ rudiments with their epithelial bud and adjacent mesenchyme look much the same at their initial stage of differentiation. The subsequent branching of the epithelial anlagen determines the final pattern of the organs, but the mesenchyme provides essential signals for epithelial differentiation. Glial cell line derived neurotrophic factor (GDNF) has recently been shown to regulate ureteric branching morphogenesis and is thereby the first defined signalling molecule in the embryonic metanephric kidney. GDNF is expressed by the mesenchyme, binds to the tip of the ureteric bud and functions in both bud induction and bud orientation. The active receptor complex for GDNF includes the receptor tyrosine kinase Ret and a novel class of glycosylphosphatidylinositol-linked receptors, called GDNF family receptor alpha s.