The early development of the metanephric kidney is characterized by the induced differentiation of mesenchymal cells into a stem cell population that undergoes a mesenchymal to epithelial transformation in response to stimuli from the ureteric bud. The Wilms' tumor suppressor gene, Wt1, is required for mesenchymal cells to complete this developmental program. In the absence of WT1, a prospective metanephric mesenchyme appears, but becomes apoptotic, and outgrowth of the ureteric bud from the Wolffian duct does not occur. Therefore, the examination of Wt1 -/- embryos allows the determination of those markers of early metanephric differentiation that do not require the ureteric bud or WT1 for their expression. Here, we demonstrate that several markers, including Pax-2, Six-2, and GDNF, were present as RNAs in the metanephric mesenchyme of Wt1 -/- embryos. These findings demonstrate that the metanephric mesenchyme in mutant embryos has begun to differentiate towards the nephrogenic lineage, and that this early differentiation does not require either WT1 or the presence of the ureteric bud. To determine whether WT1 functions other than to induce expression of factors that stimulate ureteric bud outgrowth, Wt1 -/- metanephric mesenchymes were recombined with wild-type ureteric buds in organ culture, but this failed to rescue tubulogenesis. However, the Wolffian duct from Wt1 -/- embryos was a competent inducer of wild-type metanephric mesenchyme.