The vesico-ureteric junction (VUJ) forms through a complex developmental program that connects the primordium of the upper urinary tract [the nephric duct (ND)] with that of the lower urinary tract (the cloaca). The signals that orchestrate the various tissue interactions in this program are poorly understood. Here, we show that two members of the EphA subfamily of receptor tyrosine kinases, EphA4 and EphA7, are specifically expressed in the mesenchyme surrounding the caudal ND and the cloaca, and that Epha4−/−;Epha7+/− and Epha4−/−;Epha7−/− (DKO) mice display distal ureter malformations including ureterocele, blind and ectopically ending ureters with associated hydroureter, megaureter and hydronephrosis. We trace these defects to a late or absent fusion of the ND with the cloaca. In DKO embryos, the ND extends normally and approaches the cloaca but the tip subsequently looses its integrity. Expression of Gata3 and Lhx1 and their downstream target Ret is severely reduced in the caudal ND. Conditional deletion of ephrin B2 from the ND largely phenocopies these changes, suggesting that EphA4/EphA7 from the pericloacal mesenchyme signal via ephrin B2 to mediate ND insertion. Disturbed activity of this signaling module may entail defects of the VUJ, which are frequent in the spectrum of congenital anomalies of the kidney and the urinary tract (CAKUT) in human newborns.