The formation of a continuous tubular network in the mammalian urinary system requires the interconnection of two epithelial populations with distinct cellular origins. The proximal component of the renal network is the nephron--a complex tubule responsible for much of the physiological action of the kidney. Nephrons connect to a collecting duct network to transport urine from the kidney to the bladder, via the ureter. I have used high-resolution image analysis of genetically labeled nephron and collecting duct networks together with apical and luminal markers to characterize the epithelial interconnection process in the developing kidney. Morphological protrusions at the distal end of the nephron precursor, adjacent to the tip of the collecting duct epithelium, precede luminal interconnection at the S-shaped body stage. Distal cells in the nephron precursor do not display clear epithelial junction complexes and show upregulation of phospho-myosin light chain, suggestive of a quasi-mesenchymal cell behavior. The close apposition of this group of cells with the collecting duct epithelium is facilitated by the absence on an intervening basal lamina. Live imaging of explanted kidneys suggests that distal cells break through into the lumen of the collecting duct epithelium and undergo cell death. No interconnection is observed upon Notch-mediated proximalization of distal cell fates. Furthermore, distal factor bone morphogenetic protein 2 (Bmp2) expression is lost in proximalized nephron precursor derivatives. Finally, I demonstrate that mice with specific loss of Bmp2 in nephron precursors and their derivatives results in a fraction of disconnected mature nephrons that later results in nephron atrophy and compromised renal function at juvenile stage compared to control mice. These data support a model in which the establishment of distal identity in nephron precursor cells closest to the nascent collecting duct epithelium leads to an active cell invasion that establishes a patent tubular interconnection between the nephron and collecting duct.