Wilms tumor is the most common pediatric renal neoplasm, but few molecular prognostic markers have been identified for this tumor. Somatic deletion in the long arm of chromosome 16 (16q) is known to predict a less favorable outcome in Wilms tumor, but the underlying molecular mechanisms are not known. We show that 16q deletions are typically confined to immature anaplastic-blastic tumor elements, while deletions are absent in maturing tumor components. The smallest region of deletion overlap mapped to a 1.8-Mb segment containing the IRXB gene cluster including IRX3, IRX5, and IRX6, of which IRX3 is a recently identified regulator of tubular maturation during nephrogenesis. Tumors with 16q deletion showed a lower overall mRNA expression of IRXB genes, and 16q-deleted tumor cells failed to express IRX3 while it was expressed in differentiating tubular tumor elements with intact 16q. Consistent with a role for IRX3 in tubular differentiation, gene sets linked to Notch signaling, Rho signaling, and ion channel activity were enriched in tumors with high IRX3 expression, while WTs with low expression were enriched for gene sets linked to cell cycle progression. Low mRNA levels of IRXB genes were associated with diffuse anaplasia, high-stage disease, and death. A disturbed balance between tubular differentiation and self-renewal of anaplastic-blastic elements may thus be one mechanism linking 16q deletion to adverse outcome in Wilms tumor.