At least fourteen epithelial cell types of the mammalian nephron develop from the metanephric mesenchyme. To distinguish whether this single embryological primordium contains a heterogenous population of committed renal cell lines or a multipotent stem cell, the lac-Z gene was introduced into individual renal progenitors by retroviral mediated gene transfer. The differentiated fate of lac-Z-tagged daughters derived from single metanephric mesenchymal cells was characterized after cytodifferentiation. We found that the metanephric mesenchyme contains multipotent stem cells that can generate at least three distinct cell types; glomerular, proximal and distal epithelia. After induction the fate of this multipotent cell becomes restricted to populate a single nephron segment.