The mammalian kidney develops in three successive steps from the initial pronephros via the mesonephros to the adult metanephros. Although the nephric lineage is specified during pronephros induction, no single regulator, including the transcription factor Pax2 or Pax8, has yet been identified to control this initial phase of kidney development. In this paper, we demonstrate that mouse embryos lacking both Pax2 and Pax8 are unable to form the pronephros or any later nephric structures. In these double-mutant embryos, the intermediate mesoderm does not undergo the mesenchymal-epithelial transitions required for nephric duct formation, fails to initiate the kidney-specific expression of Lim1 and c-Ret, and is lost by apoptosis 1 d after failed pronephric induction. Conversely, retroviral misexpression of Pax2 was sufficient to induce ectopic nephric structures in the intermediate mesoderm and genital ridge of chick embryos. Together, these data identify Pax2 and Pax8 as critical regulators that specify the nephric lineage.