In the kidney, formation of the functional filtration units, the nephrons, is essential for postnatal life. During development, mesenchymal progenitors tightly regulate the balance between self-renewal and differentiation to give rise to all nephron epithelia. Here, we investigated the functions of the Hippo pathway serine/ threonine-protein kinases Lats1 and Lats2, which phosphorylate and inhibit the transcriptional coactivators Yap and Taz, in nephron progenitor cells. Genetic deletion of Lats1 and Lats2 in nephron progenitors of mice led todisruption of nephrogenesis,with an accumulationof spindle-shaped cells inboth cortical andmedullary regions of the kidney. Lineage-Tracing experiments revealed that the cells that accumulated in the interstitium derived fromnephron progenitor cells and expressed E-cadherin aswell as vimentin, amyofibroblasticmarker not usually detected after mesenchymal-To-epithelial transition. The accumulation of these interstitial cells associated with collagen deposition and ectopic expression of the myofibroblastic markers vimentin and a-smooth-muscle actin in developing kidneys. Although these myofibroblastic cells had high Yap and Taz accumulation in the nucleus concomitant with a loss of phosphorylated Yap, reduction of Yap and/or Taz expression levels completely rescued the Lats1/2 phenotype. Taken together, our results demonstrate that Lats1/2 kinases restrict Yap/Taz activities to promote nephron progenitor cell differentiation in the mammalian kidney.Notably, our data also showthatmyofibroblastic cells can differentiate fromnephron progenitors.