Inductive signals cause conversion of mesenchyme into epithelia during the formation of many organs. Yet a century of study has not revealed the inducing molecules. Using a standard model of induction, we found that ureteric bud cells secrete factors that convert kidney mesenchyme to epithelia that, remarkably, then form nephrons. Purification and sequencing of one such factor identified it as leukemia inhibitory factor (LIF). LIF acted on epithelial precursors that we identified by the expression of Pax2 and Wnt4. Other IL-6 type cytokines acted like LIF, and deletion of their shared receptor reduced nephron development. In situ, the ureteric bud expressed LIF, and metanephric mesenchyme expressed its receptors. The data suggest that IL-6 cytokines are candidate regulators of mesenchymal to epithelial conversion during kidney development.