The bladder urothelium is a stratified epithelium that interconnects with the ureters to form the urinary outflow tract. A defining feature of the urothelium is its luminal population of uroplakin-expressing Superficial cells that function to create a protective, waterproof barrier. As such, proper differentiation of urothelial cell types during development and regeneration is essential for bladder function. Previous work has demonstrated that the urothelium is derived from a transient endodermal progenitor population, termed P-cells. However, two remaining uncertainties are the timing and regulation of P-cell fate. Here we show through lineage tracing that the specification of P-cells into luminal, uroplakin-expressing cell types is temporally related to the timing of endogenous retinoic acid (RA) signaling. Selective inhibition of RA signaling in P-cells through ShhCre-driven expression of the RaraT403 dominant-negative (RaraDN) mutant receptor redirected cells towards an abnormal K14+ basal fate that underwent Notch-mediated stratification into a keratinizing squamous epithelium that largely resembled epidermis. Transcriptome analysis of mutant P-cells identified aberrant expression of transcriptional regulators that have critical roles in squamous differentiation and epidermal commitment. Interestingly, inhibition of RA signaling in P-cells also resulted in improper connections between the ureters and the bladder through reduced Caspase 9-mediated apoptosis and remodeling of the common nephric duct. These observations demonstrate that RA signaling in bladder urothelial progenitor cells is required not only for proper epithelial differentiation, but also for regulating inter-organ signals that orchestrate morphogenesis of the urinary outflow tract.