An intact genome is essential for kidney growth and differentiation, but less is known about whether, and how, an altered fetal milieu modifies these processes. Maternal low-protein diets perturb growth of the metanephros, the precursor of the mature kidney. Fetal corticosteroid overexposure may, in part, mediate this, because such diets downregulate placental 11beta-hydroxysteroid dehydrogenase-2, which degrades maternal corticosteroids. We report that glucocorticoid and mineralocorticoid receptors are expressed in mouse metanephric epithelia. Metanephroi maintained in organ culture with hydrocortisone (1.4 or 14 microM) underwent a dose-dependant deceleration of overall growth accompanied by cyst formation. Dexamethasone, a glucocorticoid, reproduced these outcomes, but aldosterone, a mineralocorticoid, did not. Hydrocortisone upregulated transcripts levels of cadherin-11 and downregulated prospero-related homeobox-1, hence mimicking reported effects of maternal low-protein diet. Hydrocortisone also upregulated transcripts encoding Na(+)-K(+)-ATPase subunits and ligands for the epidermal growth factor receptor, all previously implicated in renal cyst growth. The most upregulated transcript, however, was indian hedgehog, and the encoded protein was immunodetected in metanephric cysts. Furthermore, in the presence of hydrocortisone, cystogenesis, but not whole organ growth, was significantly reduced by cyclopamine, a drug downregulating hedgehog signaling. Finally, both glucocorticoid receptor and indian hedgehog proteins were detected by immunohistochemistry in cystic tubules within human dysplastic kidneys, consistent with the hypothesis that these molecules modify the severity of this congenital malformation. Collectively, our observations raise the possibility that enhanced hedgehog signaling is an important stimulus for renal cyst formation. Furthermore, pharmacological inhibition of this pathway should be explored as a potential therapy for renal cystic diseases, starting with relevant animal models.