This study describes an in situ hybridization and immunohistochemical analysis of Lim-1 homeobox gene expression during kidney development in the rat. Lim-1 is expressed at all stages of mesonephric and metanephric kidney development. In the metanephros, Lim-1 gene mRNA is first found at day 13 in the ureteric bud, but not in uninduced mesenchyme. Expression in the mesenchyme can be seen only after mesenchymal cells have condensed around the ureteric bud tips and primary vesicles have formed. Experiments with mesenchymal explants induced to differentiate in vitro by high levels of basic FGF in the absence of ureteric bud also indicate that Lim-1 expression is correlated with tubulogenesis and this experimental model faithfully reproduces its expression in vivo. During mesenchymal differentiation Lim-1 protein and mRNA were found in comma- and S-shaped bodies, proximal and distal tubules, and collecting ducts. Lim-1 mRNA and Lim-1 protein were seen transiently at early stages of glomerulus formation. In the fully differentiated kidney Lim-1 gene products disappear from mesenchymal derivatives but persist in the collecting ducts which are derived from the ureteric bud. These data suggest a dual role for the Lim-1 homeobox gene in the developing kidney, a transient developmental function in the mesenchyme and a maintenance function in the ureteric bud and its derivatives. Further we suggest that Lim-1 is not directly involved in mesenchymal induction but may participate in its epithelial transformation at later stages as its expression in mesenchyme begins only after the formation of primary vesicle.