Epithelial–mesenchymal tissue interactions play a central role in vertebrate organogenesis, but the molecular mediators and mechanisms of these morphogenetic interactions are still not well characterized. We report here on the expression pattern of Wnt-2b during mouse organogenesis and on tests of its function in epithelial– mesenchymal interactions during kidney development. Wnt-2b is expressed in numerous developing organs in the mouse embryo, including the kidney, lung, salivary gland, gut, pancreas, adrenal gland, and genital tubercle. Additional sites of expression include the branchial arches and craniofacial placodes such as the eye and ear. The data suggest that the expression of Wnt-2b is associated with organs regulated by epithelial–mesenchymal interactions. It is typically localized in the capsular epithelium or peripheral mesenchymal cells of organ rudiments, e.g., the perinephric mesenchymal cells in the region of the presumptive renal stroma in the developing kidney at E11.5. Functional studies of the kidney demonstrate that cells expressing Wnt-2b are not capable of inducing tubule formation but instead stimulate ureter development. Incubation of isolated ureteric buds on such cells supports bud growth and branching. In addition, recombination of Wnt-2b-pretreated ureteric bud tissue with isolated nephrogenic mesenchyme results in a recovery of organogenesis and the expression of epithelial genes within the reconstituted organ explant. Lithium, a known activator of Wnt signaling (Hedgepeth et al.  Dev Biol 185:82–91), is also sufficient to promote ureter branching in the reconstituted kidney in a comparable manner to Wnt-2b signaling, whereas Wnt-4, which induces tubules, neither supports the growth of a ureteric bud nor leads to reconstitution of the ureteric bud with the kidney mesenchyme. We conclude that Wnt-2b may act in the mouse kidney as an early mesenchymal signal controlling morphogenesis of epithelial tissue, and that the Wnt pathway may regulate ureter branching directly. In addition, Wnt signals in the kidney differ qualitatively and are specific to either the epithelial ureteric bud or the kidney mesenchyme. © 2001 Wiley-Liss, Inc.