Renal epithelial cells derive from either cells of the metanephric mesenchyme or ureteric bud cells, but the origin of other renal cells is unclear. To test whether metanephric mesenchymal cells generate cells other than epithelial, we examined the developmental potential of a metanephric mesenchymal cell line (7.1.1 cells) and of primary cultures of metanephric mesenchymal cells. 7.1.1 Cells express both mesenchymal and epithelial markers and, on confluence, form well-defined monolayers expressing epithelial junctional proteins. However, 7.1.1 cells as well as primary cultures of metanephric mesenchymal cells also generate spindle-shaped cells that are positive for α-smooth muscle actin, indicating that they are myofibroblasts and/or smooth muscle; this differentiation pathway is inhibited by collagen IV and enhanced by fetal calf serum or transforming growth factor-β₁. Transforming growth factor-β₁also induces expression of smooth muscle proteins, indicating that the cells differentiate into smooth muscle. 7.1.1 Cells as well as primary cultures of metanephric mesenchymal cells also express vascular endothelial growth factor receptor 2 and Tie-2, suggesting that the metanephric mesenchymal cells that generate epithelia may also differentiate into endothelial cells. The pluripotency of the 7.1.1 cells is self-renewing. The data suggest that the metanephric mesenchyme contains embryonic renal stem cells.