Urinary tract development depends on a complex series of events in which the ureter moves from its initial branch point on the nephric duct (ND) to its final insertion site in the cloaca (the primitive bladder and urethra). Defects in this maturation process can result in malpositioned ureters and hydronephrosis, a common cause of renal disease in children. Here, we report that insertion of the ND into the cloaca is an unrecognized but crucial step that is required for proper positioning of the ureter and that depends on Ret signaling. Analysis of Ret mutant mice at birth reveals hydronephrosis and defective ureter maturation, abnormalities that our results suggest are caused, at least in part, by delayed insertion of the ND. We find a similar set of malformations in mutants lacking either Gata3 or Raldh2. We show that these factors act in parallel to regulate ND insertion via Ret. Morphological analysis of ND extension in wild-type embryos reveals elaborate cellular protrusions at ND tips that are not detected in Ret, Gata3 or Raldh2 mutant embryos, suggesting that these protrusions may normally be important for fusion with the cloaca. Together, our studies reveal a novel Ret-dependent event, ND insertion, that, when abnormal, can cause obstruction and hydronephrosis at birth; whether ND defects underlie similar types of urinary tract abnormalities in humans is an interesting possibility.