The c-ret gene encodes a receptor tyrosine kinase (RET) essential for the development of the kidney and enteric nervous system. Activation of RET requires the secreted neurotrophin GDNF (glial cell line-derived neurotrophic factor) and its high affinity receptor, a glycosyl phosphatidylinositol-linked cell surface protein GFRα1. In the developing kidney, RET, GDNF, and GFRα1 are all required for directed outgrowth and branching morphogenesis of the ureteric bud epithelium. Using MDCK renal epithelial cells as a model system, activation of RET induces cell migration, scattering, and formation of filopodia and lamellipodia. RET-expressing MDCK cells are able to migrate toward a localized source of GDNF. In this report, the intracellular signaling mechanisms regulating RET-dependent migration and chemotaxis are examined. Activation of RET resulted in increased levels of phosphatidylinositol 3-kinase (PI3K) activity and Akt/PKB phosphorylation. This increase in PI3K activity is essential for regulating the GDNF response, since the specific inhibitor, LY294002, blocks migration and chemotaxis of MDCK cells. Using an in vitro organ culture assay, inhibition of PI3K completely blocks the GDNF-dependent outgrowth of ectopic ureter buds. PI3K is also essential for branching morphogenesis once the ureteric bud has invaded the kidney mesenchyme. The data suggest that activation of RET in the ureteric bud epithelium signals through PI3K to control outgrowth and branching morphogenesis.