Pax genes are associated with a variety of developmental mutations in mouse and man that are gene dosage sensitive, or haploinsufficient. The Pax2 gene encodes a DNA binding, transcription factor whose expression is essential for the development of the renal epithelium. Both gain and loss of function mutants in the mouse demonstrate a requirement for Pax2 in the conversion of metanephric mesenchymal precursor cells to the fully differentiated tubular epithelium of the nephron. However, Pax2 expression is down-regulated as cells leave the mitotic cycle. Humans carrying a single Pax2 mutant allele exhibit renal hypoplasia, vesicoureteric reflux, and optic nerve colobomas. Conversely, persistent expression of Pax2 has been demonstrated in a variety of cystic and dysplastic renal diseases and correlates with continued proliferation of renal epithelial cells. Thus, Pax2 misexpresssion may be a key determinant in the initiation and progression of renal diseases marked by increased or deregulated cell proliferation.