Tbx18 has been shown to be essential for ureteral development. However, it remains unclear whether it plays a direct role in kidney development. Here we addressed this by focusing on examining the pattern and contribution of Tbx18+ cells in the kidney and its role in kidney vascular development. Expression studies and genetic lineage tracing revealed that Tbx18 is expressed in renal capsule, vascular smooth muscle cells and pericytes and glomerular mesangial cells in the kidney and that Tbx18-expressing progenitors contribute to these cell types. Examination of Tbx18(-/-) kidneys revealed large reduction in vasculature density and dilation of glomerular capillary loops. While SMA+ cells were reduced in the mutant, PDGFRβ+ cells were seen in early capillary loop renal corpuscles in the mutant, but fewer than in the controls, and further development of the mesangium failed. Analysis of kidney explants cultured from E12.5 excluded the possibility that the defects observed in the mutant were caused by ureter obstruction. Reduced proliferation in glomerular tuft and increased apoptosis in perivascular mesenchyme were observed in Tbx18(-/-) kidneys. Thus, our analyses have identified a novel role of Tbx18 in kidney vasculature development.