Cux-1 is a murine homeobox gene that is highly expressed in the developing kidney with expression restricted to the nephrogenic zone. Cux-1 is highly expressed in cyst epithelium of polycystic kidneys from C57BL/6J-cpk/cpk mice, but not in kidneys isolated from age-matched phenotypically normal littermates. To further elucidate the role of Cux-1 in renal development, we generated transgenic mice expressing Cux-1 under the control of the CMV immediate early gene promoter. Mice constitutively expressing Cux-1 developed multiorgan hyperplasia and organomegaly, but not an overall increase in body size. Transgenic kidneys were enlarged 50% by 6 weeks of age, with the increased growth primarily restricted to the cortex. Proliferating cells were found in proximal and distal tubule epithelium throughout the cortex, and the squamous epithelium that normally lines Bowman's capsule was replaced with proximal tubule epithelium. However, the total number of nephrons was not increased. In the developing kidneys of transgenic mice, Cux-1 was ectopically expressed in more highly differentiated tubules and glomeruli, and this was associated with reduced expression of the cyclin kinase inhibitor, p27. Transient transfection experiments revealed that Cux-1 is an inhibitor of p27 promoter activity. These results suggest that Cux-1 regulates cell proliferation during early nephrogenesis by inhibiting expression of p27.