The receptor tyrosine kinase RET functions during the development of the kidney and the enteric nervous system, yet no ligand has been identified to date. This report demonstrates that the glial cell line-derived neurotrophic factor (GDNF) activates RET, as measured by tyrosine phosphorylation of the intracellular catalytic domain. GDNF also binds RET with a dissociation constant of 8 nM, and 125I-labeled GDNF can be coimmunoprecipitated with anti-RET antibodies. In addition, exogenous GDNF stimulates both branching and proliferation of embryonic kidneys in organ culture, whereas neutralizing antibodies against GDNF inhibit branching morphogenesis. These data indicate that RET and GDNF are components of a common signaling pathway and point to a role for GDNF in kidney development.