Transgenic mice expressing wild-type murine p53 under the control of the mouse mammary tumor virus long terminal repeat (MMTV LTR) undergo progressive renal failure due to abnormal kidney development. Similar phenotypes are observed in two transgenic lines that express wild-type p53 within the ureteric bud but not in transgenic animals expressing a dominant-negative p53 mutant allele. Defective differentiation of the ureteric bud, as evidenced by altered marker expression during development, accompanies expression of the p53 transgene. At E17.5-18.5, metanephric mesenchymal cells undergo high rates of apoptosis, and fewer cells than normal are converted to tubular epithelium. As a result, p53 transgenic kidneys grow to only half of their expected size and contain about half of the normal number of nephrons, with compensatory hypertrophy of the glomeruli. In this setting, rather than arrest the cell cycle or induce apoptosis directly, abnormally high levels of wild-type p53 appear to alter cellular differentiation in embryonic ureteric buds and cause secondary effects (apoptosis and inefficient conversion to epithelium) in the adjacent undifferentiated mesenchyme.