Although it is well established that the Gdnf-Ret signal transduction pathway initiates metanephric induction, no single regulator has yet been identified to specify the metanephric mesenchyme or blastema within the intermediate mesoderm, the earliest step of metanephric kidney development and the molecular mechanisms controlling Gdnf expression are essentially unknown. Previous studies have shown that a loss of Eya 1 function leads to renal agenesis that is a likely result of failure of metanephric induction. The studies presented here demonstrate that Eya 1 specifies the metanephric blastema within the intermediate mesoderm at the caudal end of the nephrogenic cord. In contrast to its specific roles in metanephric development, Eya 1 appears dispensable for the formation of nephric duct and mesonephric tubules. Using a combination of null and hypomorphic Eya 1 mutants, we now demonstrated that approximately 20% of normal Eya 1 protein level is sufficient for establishing the metanephric blastema and inducing the ureteric bud formation but not for its normal branching. Using Eya 1, Gdnf, Six 1 and Pax 2 mutant mice, we show that Eya 1 probably functions at the top of the genetic hierarchy controlling kidney organogenesis and it acts in combination with Six 1 and Pax 2 to regulate Gdnf expression during UB outgrowth and branching. These findings uncover an essential function for Eya 1 as a critical determination factor in acquiring metanephric fate within the intermediate mesoderm and as a key regulator of Gdnf expression during ureteric induction and branching morphogenesis.