Radial patterning in the urinary tract and gut depends on reciprocal signaling between epithelial cells, which form mucosa, and mesenchyme, which forms smooth muscle and connective tissue. These interactions depend on sonic hedgehog (Shh), which is secreted by epithelial cells and induces expression of bone morphogenetic protein 4 (Bmp4), a signaling molecule required for differentiation of smooth muscle progenitors. Patterning of the specialized mucosa lining the anterior-posterior (A-P) axis may be controlled independently by regionally expressed mesenchymal transcription factors. A study by Airik et al. in this issue of the JCI reveals that T-box 18 (Tbx18), a transcription factor selectively expressed in ureteral mesenchyme, regulates smooth muscle differentiation by maintaining Shh1 responsiveness in mesenchymal progenitors. Deletion of Tbx18 resulted in defective urothelial differentiation at the level of the ureter, suggesting that Tbx18 acts via mesenchyme as an important regulator of A-P patterning in the urinary tract.