Kidney morphogenesis depends on defined zones of induction (at its edge)and differentiation (in its interior) that lead to its final radial pattern. Levinson and colleagues now report (see p. 529) that deletion of the transcription factor Foxd1 in mice causes the loss of these zones and the delayed formation and disorganisation of the nephrogenic and ureteric compartments by disrupting the normal formation of the renal capsule. In Foxd1-null mutant embryos, a single layer of Foxd1-positive stroma in the renal capsule is replaced by a thicker,heterogeneous cell layer, in which some cells express Bmp4. This induces ectopic Smad signalling in the nephron progenitors, disrupting their early patterning and, through reciprocal signalling interactions, inducing ureteric tree patterning. Thus, the renal capsule not only delineates the kidney but also acts as a barrier to inappropriate exogenous signals while providing endogenous signals needed for normal radial patterning.