In situ hybridization was used to examine, in parallel, the localization of insulin-like growth factor II (Igf2) and WT1 transcripts in normal fetal kidney and Wilms' tumor. The expression of Igf2 and WT1 transcripts in the fetal kidney is almost complementary in both the epithelial and stromal cell lineages derived from the undifferentiated metanephrogenic blastema. The patterns of transcription of Igf2 in three Wilms' tumors appeared to be perturbed as compared to the normal fetal kidney. In these tumors Igf2 transcripts were detected in structures that are developmentally equivalent to the renal vesicle, which in the normal kidney do not contain Igf2 transcripts. These results suggest that Wilms' tumors arise from an alteration in the regulation of Igf2 mRNA synthesis.