In this report we describe a novel Wnt function in kidney development. The BAT-gal transgene reporter indicated the presence of canonical Wnt signaling in the ureteric bud and its derivatives in the developing kidney. Further, in the Pygo2 mutants this signal was lost, suggesting significant reduction of Wnt signaling. In addition, we observed a resulting decrease in ureteric tip density, reduced kidney size and altered morphology of the ureteric tree in mutants, indicating a role for canonical Wnt signaling in branching morphogenesis of the ureteric bud. While the simplest interpretation is direct Wnt signaling to the ureteric bud, it remains possible that the observed abnormalities are the result of indirect effects, with altered Wnt signaling to the metanephric mesenchyme then affecting mesenchyme to ureteric bud signaling.