Obstructive nephropathy is a major cause of renal failure, particularly in newborn babies and children. After urinary tract obstruction, and under the influence of mechanical forces and cytokines produced by tubular cells and cells that have infiltrated the interstitium, resident fibroblasts undergo activation and myofibroblasts are generated from bone-marrow-derived cells, pericytes and endothelial cells. In addition, selected tubular epithelial cells can become fibroblast-like cells via epithelial–mesenchymal transition. This transition is characterized by downregulation of epithelial marker proteins such as E-cadherin, zonula occludens 1 and cytokeratin; loss of cell-to-cell adhesion; upregulation of mesenchymal markers including vimentin, α-smooth muscle actin and fibroblast-specific protein 1; basement membrane degradation; and migration to the interstitial compartment. All the events of epithelial–mesenchymal transition are strictly regulated by complex signaling pathways. Myofibroblasts and activated fibroblasts proliferate and produce large amounts of extracellular matrix, which accumulates in the tubular interstitium; together with tubular atrophy, this accumulation leads to interstitial fibrosis. This Review examines the molecular mechanisms of fibroblast activation and epithelial–mesenchymal transition, processes that seem to be promising targets for the prevention, or even reversal, of interstitial fibrosis and renal dysfunction associated with obstructive nephropathy.